Bombay High Court
Nahar Builders Ltd (Formerly Known As … vs Orchid Enclave Coopertive Housing … on 28 July, 2026
CNR No : HCBM010220732026
Neeta Sawant WP 6063 of 2026
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 6063 OF 2026
1. Nahar Builders Ltd. (formerly known ...Petitioners
as M/s. Nahar Enterprises)
2. Jitendra Amritlal Sheth (Karta and
Manager of Jt. Hindu Family)
3. Narendra Amritlal Sheth
4. Jatin Manubhai Sheth
5. Shantaben Manubhai Sheth
6. Leena Jitendra Sheth
7. Purna Jatin Sheth
8. Samir Jitendra Sheth
9. Rama Narendra Sheth
10. Amar Jatin Sheth
11. Rishabh Jatin Sheth
(Petitioner Nos. 2 to 11, members of
the Joint Hindu Family of Late Amritlal
Dalpatbhai Sheth viz. A.D. Sheth HUF)
12. Jatin Manubhai Sheth (Karta and
Manager of Jt. Hindu Family)
13. Purna Jatin Sheth
14. Amar Jatin Sheth
15. Rishabh Jatin Sheth
16. Shantaben Manubhai Sheth
(Petitioner Nos. 12 to 16, members of
the Joint Hindu Family of Late
Manubhai A. Sheth viz. M.A. Sheth
HUF)
17. Narendra Amritlal Sheth (Karta and
Manager of Jt. Hindu Family)
18. Rama Narendra Sheth
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Neeta Sawant WP 6063 of 2026
(Petitioner Nos. 17 and 18, members of
Joint Hindu Family of N.A. Sheth HUF)
19. Jitendra Amritlal Sheth (Karta and
Manager of Jt. Hindu Family)
20. Leena Jitendra Sheth
21. Samir Jitendra Sheth
(Petitioner Nos. 19 to 21, members of
Joint Hindu Family of J. A. Sheth HUF)
22. Shantaben Manubhai Sheth
23. Leena Jitendra Sheth
24. Rama Narendra Sheth
(Petitioner Nos. 22 to 24, members of
Joint Hindu Family of J.A. Sheth HUF)
V/s.
1. Orchid Enclave Co-operative ...Respondents
Housing Society Ltd.
2. The Competent Authority, District
Deputy Registrar, Co-op Societies,
Mumbai-2
3. Office of the Joint Sub Registrar of
Assurances (Class-II), Mumbai
Mr. Atul Damle, Senior Advocate with Mr. Ankit Lohia, Mr. Filji
Frederick and Mr. Pranav Pradhan i/b. FF & Associates for the Petitioners.
Mr. Mayur Khandeparkar with Mr. Amrut Joshi, Mr. Nikhil Adkine, Mr.
Tatsat Gor, Mr. Satchit Gor and Mr. Amit Chavan i/b. Mr. Kapil Gor, for
Respondent No.1.
Mr. A.C. Bhadang, AGP for State.
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CORAM : SANDEEP V. MARNE, J.
JUDGMENT RESD. ON : 21 JULY 2026.
JUDGMENT PRON. ON : 28 JULY 2026.
JUDGMENT:
1) This is a challenge to the order of deemed conveyance of land
and building in favour of a housing society at the instance of a developer,
who intends to retain control over portion of the conveyed land on which
common amenities like club house, swimming pool etc. are set up for use
by the residents of the building. Petitioner contends that application for
deemed conveyance could not have been entertained and decided in the
light of parties entering into consent terms resulting in a consent decree.
According to Petitioner, the consent decree provides for lease of portion
of conveyed land in their favour and that therefore the order of deemed
conveyance which does not provide for a lease in their favour is bad in
law.
THE CHALLENGE
2) By this Petition filed by the Petitioner-developers, order
dated 31 July 2025 passed by the District Deputy Registrar, Co-operative
Societies (2), East Suburban, Mumbai and Competent Authority
(Competent Authority) is challenged, by which land admeasuring
13,578.293 sq.m. alongwith the building is conveyed in favour of
Respondent No.1-Society.
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3) Petitioners have acquired development rights in respect of
large portion of land admeasuring 28,494.60 sq.m. situated at Sector R-3
and CTS Nos. 53/C, 53/A-1, 53A-1/A, 53-A1/D and 53A-1/C of Village-
Chandivali, Taluka-Kurla, Mumbai Suburban District. Petitioners have
constructed a building on the larger portion of land and flat purchasers
have formed society known as Orchid Enclave Co-operative Housing
Society Limited (Respondent No.1). Respondent No.1-Society had filed
L.C. Suit No. 901 of 2007 in the City Civil Court at Bombay against the
Petitioners and owners of land seeking conveyance of land and building.
The Suit also sought to restrain the Petitioner No. 1 from constructing
building ‘Blue Bell’ on the plot. The suit was compromised and consent
terms were executed between the Petitioner No. 1 and Respondent No.1-
Society. The suit was decreed in terms of the consent terms by the City
Civil Court on 25 September 2013. Under the consent terms, Petitioners
agreed to execute conveyance in respect of land admeasuring 13,629.84
sq.m. in favour of Respondent No.1. Respondent No.1 agreed to give up
claim in respect of land admeasuring 2662.98 sq.m. and agreed not to
object to construction of the building Blue Bell thereat. Under the consent
terms, Respondent No.1-Society further agreed to execute lease for a
period of 99 years in favour of M/s. Nahar Buildings and Developers Ltd.
in respect of land admeasuring 3546.31 sq.m.
4) According to the Petitioner, Respondent No.1-Society failed
to come forward for execution of conveyance deed and lease deed.
Instead, Respondent No.1 filed Application No.52 of 2025 seeking deemed
conveyance of land and building under Section 11(3) of Maharashtra
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Ownership Flats (Regulation of the promotion of construction, sale,
management and transfer) Act, 1963 (MOFA). According to the
Petitioner, Respondent No.1 suppressed the factum of execution of
consent terms and passing of consent decree dated 25 September 2013.
Application No. 52 of 2025 was resisted by the Petitioner by filing reply.
Rosa Alba Cooperative Housing Society Ltd. (Rosa Alba Society) filed
intervention application before the Competent Authority opposing
conveyance of any portion of land on which its building is located. By
order dated 31 July 2025, the Competent Authority has issued certificate
of unilateral deemed conveyance in respect of land admeasuring
13578.293 sq.m. alongwith the building situated thereon in favour of
Respondent No.1-Society. Petitioners are aggrieved by the order of the
Competent Authority dated 31 July 2025 and have filed the present
Petition.
SUBMISSIONS
5) Mr. Damle, the learned Senior Advocate appearing for the
Petitioner submits that the Competent Authority has erred in exercising
jurisdiction under Section 11(3) of MOFA by entertaining Application
No.52 of 2025. That Respondent No.1-Society has already secured
conveyance in respect of land admeasuring 13,629.84 sq.m. under the
consent decree dated 25 September 2013. That once Civil Court
determines entitlement of conveyance, it is not open for the Competent
Authority to exercise jurisdiction under Section 11(3) of MOFA. That
jurisdiction under Section 11(3) can be exercised by the Competent
Authority only where there is failure on the part of the promoters within
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the meaning of Section 11(3). That in the present case, far from there
being any failure on the part of the Petitioners, there is a consent decree
in favour of Respondent No.1 envisaging conveyance of the land. That the
real remedy for Respondent No.1 was to seek execution of consent decree
dated 25 September 2013 if it believed that Petitioners did not execute
the conveyance deed in pursuance of the consent decree. That therefore,
proceedings for conveyance cannot be initiated merely because the order
passed in the previous proceedings is not implemented. That the
Application No. 52 of 2025 was clearly hit by the principles of res judicata.
6) Mr. Damle submits that the issue involved in the Petition is
squarely covered by the judgment of this Court in Nahar Seth & Jogani
Developers Pvt. Ltd. vs. Deputy Registrar, Co-operative Societies &
Competent Authority and Anr1. He submits that Respondent No.1-
Society is deliberately not seeking execution of consent terms dated 25
September 2013 with a view to wriggle out of commitment to execute
lease in respect of land admeasuring 3546.31 sq.m. That under the
consent decree, Respondent No.1-Society is not supposed to possess
entire land admeasuring 13629.84 sq.m. and portion of that land
admeasuring 3546.31 sq.m. was required to be leased out to the
Petitioners. On the other hand, the impugned order of conveyance has
the effect of conveying entire land admeasuring 13,578.293 sq.m. without
any obligation to execute lease of land admeasuring 3546.31 sq.m. in
favour of the Petitioners. He relies on judgment of the Apex Court in
Ajanta LLP vs. Casio Keisanki Kabushiki Kaisha D/B/A Casio Computer
1
2024 SCC OnLine Bom 1662
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Company Limited and Anr.2 in support of his contention that a
compromise decree creates an estoppel by judgment and would operate as
a res judicata for subsequent proceedings involving same cause of action.
He also relies on judgment of this Court in Sanu Enterprises vs. Vikhroli
Laxmi Apartments Coop. Housing Society Limited 3 in support of his
contention of res judicata. He also relies on judgment of the Apex Court in
S. Malla Reddy vs. Future Builders Cooperative Housing Society and
Ors.4 in support of his contention that subsequent proceedings for same
relief are not maintainable. He also relies on judgment of this Court in
Sanu Enterprises Vs. Vikhroli Laxmi Apartments Housing Society Ltd. 5
7) He prays for setting aside the impugned order dated 31 July
2025.
8) Mr. Khandeparkar, the learned counsel appearing for
Respondent No.1-Society opposes the Petition. He submits that the order
of the Competent Authority results in proportionate subdivision of land
in accordance with GR dated 22 June 2018. That the Society has received
conveyance of lesser land admeasuring 13,578.293 sq.m. as compared to
the land indicated in the consent terms of 13,629.84 sq.m. He submits
that mere execution of consent terms does not prevent Competent
Authority from exercising jurisdiction under Section 11(3) of MOFA. He
relies on provisions of Section 16 of MOFA in support of his contention
that the provisions of Section 11(3) have overriding effect on contract
2
(2022) 5 SCC 449
3
Writ Petition No.491 of 2022 decided on 24 February 2026.
4
2013 SCC OnLine SC 366
5
Writ Petition No. 491 of 2022 decided on 24 February 2026
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containing contrary stipulations. That consent terms are nothing but
agreement between the parties and that consent decree is again an
agreement with imprimatur of the Court. That therefore mere covenants
of the consent terms cannot come in the way of Competent Authority
exercising jurisdiction under Section 11(3) of MOFA. That in the present
case, there is failure on the part of the Petitioners in executing the
conveyance as conveyance was actually not executed despite passage of
period of 12 long years from the date of execution of the consent terms.
That since Respondent No.1-Society has a remedy under Section 11(3) of
MOFA, it was not necessary to take the route of seeking execution of
consent decree. He submits that even otherwise, the consent terms
provide for performance of obligations in sequence. That under the
consent terms, it was the responsibility of the Petitioners to first convey
land admeasuring 13629.84 sq.m. The second obligation in sequence was
to effect registration of the conveyance. The third obligation was to effect
repairs to the building. The last obligation for Respondent No.1-Society
to execute lease deed was to kick in only after the first three obligations of
the Petitioners are discharged. That therefore, time for execution of lease
in favour of the Petitioners by Respondent No.1-Society has not arrived.
As of now, the order of the Competent Authority merely results in
fulfillment of the first obligation of the Petitioner to convey land in favour
of Respondent No.1-Society. That therefore, passing of impugned order
by the Competent Authority does not contravene the consent decree in
any manner. That since there is no conflict between the order of the
Competent Authority and the consent terms, there is no warrant for
interference in the impugned order.
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9) Mr. Khandeparkar further submits that the principle of res
judicata has no application in the facts and circumstances of present case.
That the decree dated 25 September 2013 is not the outcome of any
adjudication made by the City Civil Court. That parties merely agreed on
particular arrangement which is converted into consent decree. In such
circumstances, there is no question of application of principles of res
judicata. He relies on judgment of this Court in Paramanand Builders
LLP vs. Competent Authority & District Deputy Registrar, Cooperative
Societies and Ors.6 in support of his contention that consent terms
cannot override the statutory obligations under Section 11 of MOFA. He
relies on judgment of this Court in Prestige Garden A-1 CHSL vs. State of
Maharashtra7 in support of his contention that the principle of estoppel
does not apply. He also relies on judgment of this Court in Nahalchand
Laloochand Private Limited and Ors. vs. Shri Panchamrut CHSL and
Ors.8 in support of his contention of broad contours of enquiry under
Section 11 of MOFA. He submits that in a summary enquiry conducted
under Section 11, the Competent Authority has not caused any violence
to the consent decree. He accordingly prays for dismissal of the Petition.
REASONS AND ANALYSIS
10) The case involves a unique conundrum. Petitioner-
developers completed construction of 5 buildings of Respondent No. 1
Society and desired construction of an additional building in the layout.
In a composite Suit filed by the Respondent No.1-Society to stop the
6
2026 SCC OnLine Bom 1522
7
2024 SCC OnLine Bom 5625
8
2025 SCC OnLine Bom 341
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Petitioner No. 1 from constructing an additional building in the layout
and for seeking conveyance of the entire layout land, a compromise took
place. Under the compromise, the Society decided to give up its challenge
against construction of additional building upon acceptance of some
consideration and against a promise to carry out repairs and painting
works in its buildings. Under the compromise, the Petitioner-developer
agreed to convey the proportionate land to the Society (leaving aside the
land meant for construction of additional building), but upon a condition
that it would retain the land and structure forming part of common
amenities and accordingly extracted a promise from the Respondent No. 1
Society to lease back 26% of the conveyed land almost free of costs.
11) After striking a deal with the Society leading to a consent
decree, the Petitioners faltered on its undertaking to convey land in
favour of the Society for 12 long years. In the meantime, they took
advantage of the Consent Terms by completing construction of the
additional building, sold flats therein and earned profits. After waiting for
12 long years, the Society approached the Competent Authority seeking
conveyance of land. By allowing the Application filed by the Society, the
Competent Authority has conveyed slightly lesser land than the one
agreed under the Consent Terms. Petitioners have challenged the Order
of the Competent Authority because it does not grant to them lease of the
land on which common amenities of the Society are situated.
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CONVEYANCE OF LAND BY THE COMPETENT AUTHORITY
12) By the impugned order and certificate dated 31 July 2025, the
Competent Authority has granted conveyance of land admeasuring
13,578.293 sq.m. in favour of Respondent No.1-Society. The Competent
Authority has relied upon sanctioned plan dated 31 May 2005, on the
basis of which buildings of Respondent No.1-Society are constructed. It
appears that the construction was undertaken in respect of plot
admeasuring 16,292.82 sq.m. After deducting 15% area reserved for
Recreation Ground (RG), the balance area of land available was 13,848.9
sq.m. It appears that the Municipal Corporation sanctioned total built-up
area (BUA) of 18,313.13 sq.m. out of which BUA of 15,262.28 sq.m. is
utilised in construction of buildings of the Respondent No.1-Society. The
Competent Authority has accordingly determined the proportionate share
of Respondent No.1-Society in the land as 83.34%. The Competent
Authority has thereafter divided both the net plot area of 13,848.90 sq.m.
and RG area of 2443.92 sq.m. by taking into consideration share of
Respondent No.1-Society of 83.34%. Accordingly, the land entitlement of
Respondent No.1-Society is determined as under:
(i) 83.34% of net plot area of 13,848.90 sq.m. 11541.673 sq.m.
(ii) 83.34% of RG land of 2443.92 sq.m. 2036.762 sq.m.
TOTAL 13,578.293 sq.m. 13) It appears that Rosa Alba Society had filed Intervention
Application before the Competent Authority and had expressed an
apprehension that the Respondent No. 1 Society was seeking conveyance
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Neeta Sawant WP 6063 of 2026of land admeasuring 2662.98 sq.m. excluded for its building under the
Consent Terms. The Competent Authority has considered the objection of
Rosa Alba Society and has undertaken the exercise of land division
proportionate to the BUA used for buildings of the two societies. After
conveying 83.34% land admeasuring (11541.673 + 2036.762) 13578.293
sq.m. to Respondent No. 1 Society, the balance 16.66% land admeasuring
2714.527 sq.m. in the layout is left for Rosa Alba Society.
14) This is how the Competent Authority has determined the
share of Respondent No.1-Society and of Rosa Alba Society in the land
(net plot area as well as RG) proportionate to the BUA utilised in
construction of their respective buildings in the layout. What is done by
the Competent Authority is in accordance with the procedure prescribed
in the Government Resolution dated 22 June 2018, which provides for
land division in the layout proportionate to BUA utilised in construction
of each building. Relevant part of the GR provides thus:
If there are many buildings on one plot and have a separate co-operative society
of each building and if construction of some of them is incomplete then while
making Deemed Conveyance of completed building, undivided share of
occupancy right in the proportion of construction on the proportionate area of
the construction of the building of such society or ground coverage or plinth
area, similarly open space, common services and facilities, roads should be
given.
15) This Court has repeatedly upheld the principle of land
division proportionate to the BUA utilized in construction of each
building while granting conveyance to a society whose building is located
in the layout development and where all societies do not come together
for seeking conveyance of the whole land in the layout.
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16) Ordinarily therefore, what is done by the Competent
Authority is in accordance with law. This is the reason why Petitioners
have not seriously disputed the computations made by the Competent
Authority. In the present petition, Petitioners do not contend that
Respondent No.1-Society is not entitled to conveyance of land
admeasuring 13,578.293 sq.m. However, the certificate of deemed
conveyance is challenged only on the ground that there has been a
consent decree passed in the suit filed by Respondent No.1-Society and
that therefore, the Competent Authority could not have entertained
application of Respondent No.1 for deemed conveyance. In short, what is
questioned by the Petitioners is the jurisdiction of the Competent
Authority to entertain the application filed under Section 11(3) of the
MOFA for unilateral deemed conveyance when there is already a decree of
Civil Court for conveyance of land in favour of Respondent No.1-Society.
PROVISIONS OF MOFA
17) The provision for unilateral deemed conveyance has been
introduced by the Legislature by amending Section 11 of MOFA after
noticing a trend where the developers/landowners were deliberately
avoiding conveyance of land and building in favour of organisation of flat
purchasers. Such avoidance on the part of developers was with the
objective of utilising future development potential in the land by putting
additional construction on the basis of additional FSI sanctioned due to
the change in the FSI regime. It was felt that the provisions of unamended
Section 11 imposing statutory duty on the promoter to convey the land
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and building in favour of organisation of flat purchasers was ineffective. It
was also noticed that the organisation of flat purchasers were required to
file suits and fight a long litigation for securing the conveyance. It would
be apt to consider the Statement of Reasons and Objects for 2008
Amendments to Section 11 of MOFA, which is as under:
STATEMENT OF OBJECTS AND REASONS
The Maharashtra Ownership Flats (Regulation of the promotion, of
construction, sale, management and transfer) Act, 1963 has been enacted by the
Government of Maharashtra in the year 1963 to regulate for a certain period in
the State, the promotion of the construction of, the sale and management, and
the transfer of flats on ownership basis. The said Act has been enacted to
effectively prevent the sundry abuses and malpractices which had been on
increase, consequent upon the acute shortage of housing in the several areas of
the State.
2. It has come to the notice of the Government that the objective behind
enactment of the said law is not fully achieved and its implementation
has not been effective enough to curb certain malpractices and sundry
abuses by the promoters or developers of the properties. Therefore, to
make provisions of the said Act more effective and to safeguard interests of the
purchaser of the flats, the Government of Maharashtra considers it expedient to
carry out certain amendments to the existing provisions of the said Act. The
important amendments proposed to be carried out are as follows:-
(a) It is proposed to provide for appointment of one or more Competent
Authorities for different local areas who would, on failure on the part of the
promoter,-
(1) to form a co-operative society of the persons who have purchased the flats
from the promoter, on application received from such purchasers, direct the
District Deputy Registrar, Deputy Registrar or, as the case may be, the Assistant
Registrar of Co-operative Societies to register the co-operative society of such
flat owners:
(i) to execute a conveyance within the prescribed period as provided
in section 11, on receiving an application from the flat owner members of
a co-operative society, issue a certificate to such society certifying that the
said society was entitled to have a conveyance registered and that it is a
fit case for execution of a unilateral conveyance as a ‘ deemed conveyance
in favour of the said society. by the Registration Officer under the
Registration Act, 1908.-
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(b) To serve as a deterrent, a provision is also being made for disqualifying a
promoter, convicted under the said Act (except under section 12A), for a period
of five years so as to debar him from being granted any permission by the local
authorities under the relevant laws for undertaking construction of flats.
(c)The proceedings before the Competent Authority are given the status of
judicial proceedings for the purposes of sections 193 and 228 of the Indian
Penal Code and every Competent Authority is to be deemed to be a Civil Court
for the purpose of sections 345 and 347 of the Code of Criminal Procedure,
1973.
3. The Bill seeks to achieve the above objectives.
(emphasis added)
18) The Legislature has therefore created a faster and swifter
mechanism of unilateral deemed conveyance without the consent of the
landowner or promoter. Accordingly, provisions of sub-sections (3), (4)
and (5) are introduced in Section 11 of MOFA wherein an organisation of
flat purchasers can file an application before the Competent Authority
and seek certificate of unilateral deemed conveyance of land and building
which can be registered as a conveyance under sub-section (5).
Provisions of Section 11 of MOFA read thus:
11. Promoter to convey title, etc., and execute documents, according to
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).
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(3) If the promoter fails to execute the conveyance in favour of the Co-operative
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 (16 of 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 appointed under the Registration Act, 1908 (16
of 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 (16 of 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’.
19) Under sub-section (1) of Section 11 of MOFA, there is a
statutory duty on the promoter to convey in favour of the organisation of
flat purchasers the land and the building within the prescribed period. If
the promoter fails to perform the statutory duty under Section 11(1) of
the Act, there is a remedy for the organisation of flat purchasers under
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Section 11(3). The application for unilateral deemed conveyance can be
filed by the organisation of flat purchasers under sub-section (3) of
Section 11 of MOFA ‘If the promoter fails to execute the conveyance’. Thus,
occurrence of failure by the promoter to convey the land and building
becomes a jurisdictional fact for the Competent Authority to exercise
jurisdiction under Section 11(3). The ‘failure’ within the meaning of
Section 11(3) occurs when the promoter fails to execute conveyance
under Section 11(1) within the prescribed period. Rule 9 of Maharashtra
Ownership Flats (Regulation of the Promotion of Construction etc.) Rules,
1964 (MOFA Rules) has prescribed the period for promoter to convey the
land and building as four months from the date on which a co-operative
society or a company is registered or an association of flat purchasers is
constituted. Rule 9 of MOFA Rules reads thus:
9. Period for conveyance of title of promoter to organisation of Flat
purchasersIf no period for conveying the title of the promoter to the organisation of the
flat purchasers is agreed upon, the promoter shall (subject to his right to
dispose of the remaining flats, if any) execute the conveyance within four
months from the date on which co-operative society or the company is
registered or, as the case may be, the association of flat takers is duly
constituted.
When a promoter has submitted his property to the provisions of the
Maharashtra Apartment Ownership Act, 1970 by executing and regustering a
Declaration as required by section 2 of that Act, and no period for conveying the
title of the promoter in respect of an apartment to each apartment-taker is
agreed upon, the promoter shall execute the conveyance or deed of apartment
in favour of each apartment-taker within four months from the date the
apartment-taker has entered into possession of his apartment.
The promoter shall file with the Competent Authority a copy of the conveyance
executed by him under sub-section (1) of section 11 within a period of two
months from the date of its execution.
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20) Before proceeding further, provisions of Section 16 of MOFA
also needs to be noted. Noting that the provisions of the Transfer of
Property Act, 1882 may come in the way of implementation of the
statutory scheme of MOFA and to ensure that the contracts to the
contrary executed by the developers do not defeat the statutory rights of
the flat purchasers, the Legislature has incorporated Section 16 in MOFA,
which provides thus:
16. Act to be in addition to Transfer of Property Act and to over-ride
contract to the contrary.–
The provisions of this Act, except where otherwise provided, shall be in addition
to the provisions of the Transfer of Property Act, 1882 (IV of 1882), and shall
take effect notwithstanding anything to the contrary contained in any contract.
21) Thus Section 16 of MOFA overrides contractual covenants to
the contrary. Section 16 is an important provision, which is aimed at
nullifying any private deal or unfair bargain struck by the developers with
the flat purchasers and ensures that the statutory rights of the flat
purchasers would override such contractual deal/bargain. When the
statutory scheme of MOFA and MOFA Rules provide for obligation and
duty to convey the land and the building in favour of organisation of flat
purchasers within the prescribed time, the promoter cannot contractually
agree that either there would be no conveyance or conveyance would be
executed after 25 years or that conveyance would be executed after
completion of entire layout development or that only leasehold rights in
the land would be assigned retaining the ownership in favour of
promoter/land owner, etc. Section 16 ensures that any contract to the
contrary cannot defeat the statutory right of the organisation of flat
purchasers to seek unconditional conveyance of whole of the land (as per
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its entitlement) without retaining any specie of right therein in favour of
the promoter/landowner. Section 16 of MOFA is aimed at curbing the
tendencies on the part of the promoters and landowners in avoiding to
convey unconditional ownership of whole of the land.
FILING OF CONSENT TERMS AND PASSING OF DECREE IN PURSUANCE THERETO
22) In the present case, the commencement certificate for
construction of buildings of Respondent No.1-Society was apparently
issued on 18 October 1989 and further approval was granted on 12 August
1995. Petitioners constructed building of Respondent No.1-Society
comprising of Wings-A, B, C, D and E named ‘Orchid Enclave’. The
building received occupancy certificate on 2 June 2005. The flat
purchasers formed Respondent No.1-Society, which was registered on 30
January 2006. Petitioners, however, failed to execute conveyance in
favour of the Society, which led to filing of L.C. Suit No. 901 of 2007 by
the Society. The suit was essentially required to be filed because the
Petitioners were planning to construct one more building in the layout by
name ‘Blue Bell’. Respondent No.1-Society was opposed to construction
of an additional building in the layout and therefore in L.C. Suit No.901 of
2007, they sought restraint order against Petitioner No.1 from putting any
additional construction in the form of Blue Bell building. Respondent
No.1-Society also sought prayer for conveyance of the entire larger land.
The suit was compromised between Respondent No.1-Society and
Petitioner No.1-developer and consent terms dated 25 September 2013
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were tendered in L.C. Suit No. 901 of 2007. The relevant clauses of the
Consent Terms are as under:
2. The Defendants no. 1 do hereby agree and undertake to assign, transfer and
convey in the exclusive and absolute favour of the Plaintiff no. 1, all that piece
and parcel of land admeasuring 13,629.84 sq. meters along with the structures
thereon shown bounded by red colour boundary including the five (5) wings of
the Orchid Enclave Building bearing the names as “A”, “B”, “C”, “D” and “E”
Wing, situate lying and being on the larger plot of land bearing Sector no. R-3
admeasuring in the aggregate about 28,494.60 sq. meters and comprising of the
land bearing CTS no. 53/C, 53/A-1, 53-A/1-A, 53-A/1-D and 53-A/1-C, of Village
Chandivali, Taluka Kurla, Mumbai Suburban District and Sub-District of
Mumbai, on the plan annexed hereto and marked as ANNEXURE A strictly in
terms set out in the draft Deed of Conveyance accepted and approved by the
parties hereto and the copy whereof acknowledged as accepted and approved by
the parties is annexed herewith and marked as ANNEXURE B.
3. The Deed of Conveyance duly signed by the parties shall be lodged for
registration by the Plaintiff no. 1 in the office of Sub-Registrar and the
Defendants No. 1 agree and undertake to attend the office of the Sub-Registrar
of Assurances at Chembur at such time and date as may be mutually agreed
between the parties and in any event within thirty (30) days of the execution
hereof to confirm and admit the execution and for the purposes of Registration
of the said Deed of Conveyance more particularly detailed in clause (2) above.
The Defendants no. 1 agree and undertake that the responsibility of getting the
said Deed of Conveyance registered with the concerned sub-registrar of
Assurances within the aforesaid period of thirty (30) days would be that of the
Defendants no. 1 alone. The stamp duty and registration charges, if any,
payable on the said Deed of Conveyance shall however be borne by the Plaintiff
no. 1. alone.
4. The Defendant no. 1 has on or before the execution hereof paid to the
Plaintiff no. 1 the sum of Rs. 5,00,00,000/- (Rupees Five Crores only) by Demand
Draft/Pay Order dated 18/09/2013, bearing no. 000837, drawn on HDFC Bank in
favour of the Plaintiff no. 1, as and by the way of Society Fund. The Plaintiff no.
1 admit and acknowledge the payment of the said amount. The Defendant no. 1
further agrees and undertakes to carry out the work of repairs of leakages and
the painting of the said five (5) wings of the Orchid Enclave Building bearing the
names as “A”, “B”, “C”, “D” and “E” Wing and also replace / install the missing
electric poles in the garden of the Orchid Enclave complex with all requisite
permission from the competent authorities, if required. The said work shall be
carried out as soon as may be practicable and in any event within six (6) months
of the execution of these presents.
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5. The Plaintiff no. 1 in the light of the above, agree and undertake to
permanently relinquish and waive all and every of their right, title, interest
and/or claim to seek the conveyance of the land admeasuring 2662.98 sq.
meters more particularly delineated in blue colour boundary lines on the plan
annexed hereto and marked as ANNEXURE C. The Plaintiff no. 1 in
consideration of the payment of the said Society Fund, hereby withdraw and
revoke all and every of their objection to the construction of the building known
as “Blue Bell” on the said delineated land and further declare and confirm that
the said delineated land and the building constructed thereon, as aforesaid
would at all times belong to the Defendants no. 1 and that they would be
entitled to deal with and dispose off the same as they may deem fit, without any
recourse to the Plaintiff no. 1.
6. Consequent upon to the fulfilment of its obligations by the Defendants no. 1,
in terms of clause (2), (3) and (4) above, the Plaintiff no. 1 agree and undertake
to execute and register a Deed of Lease for the period of 99 years, in respect of
the land admeasuring 3546.31 sq. meters, along with the structure constructed
thereon and more particularly delineated in green colour boundary lines in the
plan annexed herewith at Annexure C in favour of M/s. Nahar Builders and
Developers Ltd., strictly on such terms and conditions and for such
consideration as is set out in the draft Lease Deed the copy whereof, duly
accepted and approved by the parties, is annexed herewith and marked as
ANNEXURE D The Plaintiff no. 1 agree and undertake to attend to the office of
the Sub-Registrar of Assurances at Chembur for the purposes of confirmation of
the execution and for registration of the said Lease Deed simultaneous to the
registration of the Deed of Conveyance in terms of clause (2) above. The stamp
duty and the registration charges, if any, payable on the said Lease Deed and all
out of pocket expenses in respect thereof shall however be borne by the
Defendants no. 1 alone.
23) Thus, Petitioner No.1 agreed and undertook to assign,
transfer and convey land admeasuring 13,629.84 sq.m. in favour of
Respondent No.1 alongwith the structure thereon comprising of Orchid
Enclave building with ‘A’ to ‘E’ wings. Under Clause 3 of the consent
terms, Petitioner No.1 undertook to register the conveyance within a
period of 30 days of execution of the consent terms. Under Clause 5, the
Society gave up its challenge to construction of the building Blue Bell by
accepting consideration of Rs. 5 Crore from Petitioner No. 1 in addition to
promise for carrying out repairs and painting works to its buildings under
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Clause 4. Under Clause 6, the Society agreed to grant lease in respect of
land admeasuring 3546.31 sq.m. in favour of an entity named ‘Nahar
Builders and Developers Ltd.’ as per the draft annexed to the Consent
Terms. The draft of the Lease Deed annexed to the Consent Terms would
indicate that what was supposed to be leased out is the land on which the
building’s common amenities like club house, swimming pool, tennis
court, etc. are situated. The draft Lease Deed also contemplated
permission to the lessee to carry out construction of basement and
ground floor parking spaces.
24) Thus, the Consent Terms envisage a unique arrangement
where the Petitioner No. 1, after conveying the lawfully due land to the
Society, wants the Society to hand back substantial portion (26%) of such
conveyed land to its group entity almost free of cost (on lease rent of Rs.
1). More importantly, the Consent Terms envisage loss of common
amenities meant for the Respondent No. 1 Society by handing over the
same to the developer, with further permission for the developer to
construct additional parking spaces therein. The Consent Terms thus
envisage a situation where after milking the entire development potential
flowing out of the layout land, Petitioner No. 1 wants to retain the
common amenities in the form of Club House, Swimming Pool, Tennis
Court, etc. to itself.
25) The Consent Terms were tendered in L.C. Suit No.901 of 2007
and accordingly, the learned Judge of the City Civil Court passed a decree
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in terms of the Consent Terms on 25 September 2013. Accordingly, the
decree came to be drawn up in view of the Consent Terms.
WHETHER ‘FAILURE’ ON THE PART OF PROMOTER HAS OCCURRED?
26) As observed above, failure on the part of the promoter to
convey land as per Section 11(1) becomes the jurisdictional fact for the
Competent Authority to exercise jurisdiction under Section 11(3) to grant
deemed conveyance. It is therefore necessary to examine whether a
‘failure’ within the meaning of Section 11(1) of MOFA has occurred in the
present case for the Competent Authority to exercise jurisdiction under
Section 11(3).
27) Though Petitioner No.1 agreed and undertook to convey land
admeasuring 13,629.84 sq.m. in terms of the consent terms dated 25
September 2013, he did not perform the obligation. While it completed
the construction of Blue Bell building taking benefit of Clause-5 of the
consent terms, it failed to execute and/or register conveyance deed in
favour of Respondent No.1-Society. The Society waited for 12 long years
for Respondent No.1 to execute the conveyance. In my view therefore,
there is a ‘failure’ on the part of Petitioner No.1 to convey the land and
the building within the meaning of Section 11(1) of MOFA. The case does
not involve a situation where conveyance in terms of the decree is
actually executed. If such conveyance was executed, the ‘failure’ within
the meaning of Section 11 (3) would not have occurred and Competent
Authority could not have exercised the jurisdiction. However, since
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conveyance was actually not executed, it will have to be necessarily
assumed that there is a ‘failure’ on the part of Petitioner No.1 to convey
the land and the building.
28) Section 11(1) of MOFA mandates that the promoter shall
convey his right, title and interest in the land and the building and ‘shall
execute’ all relevant documents therefor in accordance with the
agreement executed under Section 4. The act of ‘conveyance’ does not
occur unless a Deed of Conveyance is executed and registered. It is only
when the act of registration of the Conveyance Deed happens that it can
be presumed that there is fulfillment of statutory duty under Section 11(1)
and that there is no ‘failure’ on the part of the promoter. However, mere
‘agreement’ by the promoter for conveyance would not be sufficient for
the purpose of holding that there is fulfillment of the statutory duty and
that there is no failure on the part of the promoter within the meaning of
Section 11(3) of MOFA. Failure would not occur only when the act of
conveyance is completed. The legislative objective behind Section 11 is to
ensure that the organisation of flat purchasers must be vested with title,
and legal effect of vesting gets completed only when a Deed of
Conveyance is executed and registered. Therefore, mere agreement or
undertaking by a developer to convey the land and building would not be
sufficient to hold that there is no failure within the meaning of Section
11(3) of the Act.
29) In the present case, Petitioner No.1-developer did not convey
the land and the building in favour of Respondent No.1-Society for 12
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long years after passing of the consent decree dated 25 September 2013.
In my view therefore, failure within the meaning of Section 11(3) of
MOFA has clearly occurred in the facts and circumstances of the present
case. What must be appreciated is the legislative intent behind making
provision for unilateral deemed conveyance through Competent
Authority under Section 11(3) to (5) of MOFA. The objective is to obviate
the need by organisation of flat purchasers to enter into lengthy litigation
for the purpose of seeking conveyance. The legislature has provided for a
summary enquiry while granting certificate of unilateral deemed
conveyance by the Competent Authority. Therefore, while the option of
filing execution proceedings was open to Respondent No.1-Society, the
same would have resulted into a lengthy litigation between the parties.
Instead, the Society has taken aid of a swifter and faster remedy under
Section 11(3) of MOFA. Since there is ‘failure’ on the part of Petitioner
No.1-developer within the meaning of Section 11(3) of MOFA, the
Competent Authority has correctly exercised the jurisdiction in granting
certificate of unilateral deemed conveyance.
CONVEYANCE OF LAND WITHIN THE LIMITS OF CONSENT TERMS
30) In the present case, upon noticing failure on the part of the
promoter, Competent Authority has exercised the jurisdiction and has
conveyed in favour of Respondent No. 1 Society land admeasuring
13578.293 sq.m. Under the Consent Terms, the Petitioner No. 1 had
agreed and undertaken to convey land admeasuring 13629.84 sq.m. to
Respondent No. 1 Society. Thus, the case does not involve conveyance of
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land to Respondent No.1-Society by the Competent Authority in excess
than the one agreed in the Consent Terms. This is clear from the
following:
Land agreed to be conveyed Land conveyed vide certificate of
unilateral deemed conveyance
13629.84 sq.m. 13578.293 sq.m.
31) Similarly, Rosa Alba Society also does not get land lesser than
the one agreed under the Consent Terms. This is clear from the following:
Land reserved for Rosa Alba Land remaining balance after
Society under Consent Terms conveyance in favour of
Respondent No.1 Society2662.98 sq.m. 2714.527
32) Thus, it cannot be contended that the certificate of unilateral
deemed conveyance issued by the Competent Authority contravenes the
Consent Terms in any manner. In fact, the certificate conveys lesser land
to Respondent No.1-Society than the one agreed in the Consent Terms.
IS CERTIFICATE OF DEEMED CONVEYANCE BAD FOR NON-GRANT OF LEASE IN
FAVOUR OF PETITIONERS?
33) Mr. Damle has contended that the certificate of deemed
conveyance does not take into consideration the right of Petitioners to
have a lease in respect of land admeasuring 3546.31 sq.m. and that
therefore the same contravenes the consent terms. I am unable to agree.
The Competent Authority exercising jurisdiction under Section 11 of
MOFA is not expected to decide entitlement of the developer to secure
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lease in respect of the conveyed land from the society. That enquiry
would be outside the jurisdiction of the Competent Authority. The
Competent Authority has limited jurisdiction to convey land and building
in favour of the society. If the developer is entitled to secure any other
right in the property, he needs to adopt appropriate proceedings for the
same and he cannot expect the Competent Authority to grant such right.
In the present case, it was not competent for the Competent Authority to
direct Respondent No.1-Society to execute conveyance of land
admeasuring 3546.31 sq.m. in favour of the Petitioners. Reliance in this
regard by Mr. Khandeparkar on judgment of this Court in Nahalchand
Laloochand Pvt. Ltd. vs. Shri. Panchamrut CHSL (supra) outlining the
limited scope of inquiry under Section 11 by the Competent Authority is
apposite.
34) Clause 6 of the Consent Terms begins with the expression
‘Consequent upon to the fulfilment of its obligations by the Defendants no. 1,
in terms of clause (2), (3) and (4) above’. Thus, the occasion for execution of
lease under the Consent Terms would arise only after the land was first
conveyed in favour of the Respondent No. 1-Society. That event itself had
not occurred and therefore the Society was required to knock the doors of
the Competent Authority to first seek conveyance of land in its favour. All
that is done at this juncture is conveyance of land in favour of the
Respondent No. 1 Society. The order of the Competent Authority, in no
manner, comes in the way of Petitioners seeking execution of the consent
decree for seeking lease of portion of the conveyed land.
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35) It also appears that under the Consent Terms, lease of land
admeasuring 3546.31 sq.m. was agreed to be conveyed in the name of an
altogether different entity ‘M/s. Nahar Builders and Developers Ltd.’.
Petitioner No. 1 before me is ‘Nahar Builders Ltd’. Whether both the
entities are same or distinct is unknown. Secondly, the said entity or
Petitioner No.1 have the remedy of seeking execution of the conveyance
deed for the purpose of securing lease in respect of land admeasuring
3546.31 sq.m. In such execution proceedings, Respondent No.1 would be
entitled to raise all defences. Whether a promoter can seek back lease of
portion of the conveyed land and whether such a term is in accordance
with the provisions of Sections 4 and 11 of MOFA is something which can
be decided in appropriate proceedings. This Court need not delve deeper
into those issues. Suffice it to hold that mere agreement in the consent
terms for execution of lease of land admeasuring 3546.31 sq.m. in favour
of the entity M/s. Nahar Builders and Developers Ltd. cannot be a ground
for Competent Authority not to convey the land and the building in
favour of Respondent No.1-Society. In my view therefore, the impugned
order passed by the Competent Authority does not contravene the
consent decree in any manner.
36) Mr. Damle has strenuously relied on judgment of this Court
in Nahar Seth & Jogani Developers Pvt. Ltd. (supra). However, careful
perusal of the observations made by this Court in that judgment would
indicate that jurisdiction of Competent Authority to decide application
under Section 11(3) of MOFA after execution of the consent terms is not
negatived by this Court. On the other hand, this Court has repeatedly held
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in that judgment that Competent Authority was expected to apply its
mind to the consent decree and consent terms and then pass order of
unilateral deemed conveyance. This is clear from the following
observations made by this Court in the judgment:
12. … Once the entire position was placed before the Competent Authority, all
that the Competent Authority was required to do was to apply its mind to the
Consent Decrees and Consent Terms.
13. It is seen that Competent Authority has miserably failed to apply its mind
and without considering the essence of the same has passed the impugned
order. …
14. … The Consent Terms and the Consent Decrees passed by the Civil Court are
completely disregarded and set to naught by virtue of the impugned order dated
04.03.2022. Such an impugned order is clearly not sustainable.
37) Thus, judgment of this Court in Nahar Seth & Jogani
Developers Pvt. Ltd. does not conclude that Competent Authority ceases
to have jurisdiction under Section 11 of MOFA after a consent decree is
passed based of consent terms filed by the parties. All that this Court has
held in Nahar Seth & Jogani Developers Pvt. Ltd. is that the Competent
Authority ought to have granted conveyance in accordance with the
consent terms. In the present case, the Competent Authority has not
contravened the consent decree while exercising its limited jurisdiction
under Section 11(3) and (4) of MOFA and has conveyed lesser land than
the one contemplated in the consent decree. It appears that in the facts of
the case in Nahar Seth & Jogani Developers Pvt. Ltd., while setting aside
the order passed by the Competent Authority, this Court has issued
directions for execution of deed of conveyance by the developer in favour
of the society and deed of lease by the society in favour of the developer. I
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am unable to follow the said course of action in the present case for
variety of reasons. Firstly, this Court is exercising supervisory jurisdiction
over the order passed by the Competent Authority, which did not have
jurisdiction to direct execution of lease in favour of the developer under
Section 11 of MOFA. Therefore, what could not have been done by the
Competent Authority cannot be done by this Court in exercise of
jurisdiction under Article 227 of the Constitution of India. Secondly and
more importantly, execution of lease under thee Consent Terms is
dependent on Petitioner No.1 executing repairs and painting works in the
building of Respondent No.1 Society. It is not known whether Petitioner
No.1 has fulfilled that obligation or not. Performance of obligations under
the consent terms is sequential (which aspect is dealt with in greater
details in the latter part of the judgment). Therefore in the facts of this
case, it is not possible to issue a direction to the Respondent No.1 Society
to execute lease in favour of Petitioner No.1. Thirdly, in the facts of the
present case, this Court is satisfied that the order of the Competent
Authority directing conveyance of lesser land than the one agreed in the
consent terms does not amount to violation of the consent terms.
38) As observed above, if Petitioners want to have the lease of
the portion of the land executed in their favour, they need to exercise
remedy available in law. Mr. Damle has submitted that Petitioners have
already filed application for execution of the consent decree dated 25
September 2013. Copy of the Execution Application No. 31 of 2026 is
placed on record at Exhibit-J to the Petition. The date of filing of
Execution Application is not disclosed by the Petitioners. But the same
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appears to have been filed after filing of Application for deemed
conveyance by the Respondent No. 1 Society. Thus, the Petitioners, who
showed no interest in acting in terms of the Consent Decree for 12 long
years, suddenly developed interest in execution of decree and filed
Execution Application, filing of which was aimed at somehow defeating
the Application for deemed conveyance. This conduct on the part of the
Petitioner needs to be deprecated. The direction sought for by the
Petitioners in Execution Application again shows that the conveyance of
land by the Competent Authority does not contravene the consent decree.
In Clause ‘J’ of Execution Application, Petitioners have sought a direction
that Plaintiff-society is entitled to portion of land admeasuring 13629.84
sq.m. As against this, the Competent Authority has conveyed land
admeasuring 13578.293 sq.m. to Respondent No. 1 Society.
39) Petitioner can press its entitlement for execution of lease
before the Executing Court which can decide the same after taking into
consideration all defences that can be raised by Respondent No.1-Society.
Therefore there is no warrant for setting aside the order of the Competent
Authority only because the order does not grant lease of portion of land in
favour of the Petitioner.
APPLICATION OF PRINCIPLE OF ESTOPPEL
40) Mr. Damle has relied upon judgment of the Apex Court in
Ajanta LLP (supra) in support of his contention that a compromise decree
creates estoppel by judgment. The judgment also holds that a consent
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decree would not serve as an estoppel where compromise was vitiated by
fraud, misrepresentation or mistake. The Apex Court has held in paras-20
to 22 as under:
20. Resolving a dispute pertaining to a compromise arrived at between the
parties, this Court in Shankar Sitaram Sontakke [Shankar Sitaram
Sontakke v. Balkrishna Sitaram Sontakke, AIR 1954 SC 352] held as under : (AIR
p. 353, para 7)“7. … If the compromise was arrived at after due consideration by the
parties and was not vitiated by fraud, misrepresentation, mistake or
misunderstanding committed by the High Court — the finding which was
not interfered with by the High Court — it follows that the matter which
once concluded between the parties who were dealing with each other at
arm’s length cannot now be reopened.”
21. A judgment by consent is intended to stop litigation between the
parties just as much as a judgment resulting from a decision of the Court
at the end of a long drawn-out fight. A compromise decree creates an
estoppel by judgment [Byram Pestonji Gariwala v. Union Bank of India, (1992) 1
SCC 31] . It is relevant to note that in Byram Pestonji Gariwala [Byram Pestonji
Gariwala v. Union Bank of India, (1992) 1 SCC 31], this Court held that the
appellant therein did not raise any doubt as to the validity or genuineness of the
compromise nor was a case made out by him to show that the decree was
vitiated by fraud or misrepresentation. While stating so, this Court dismissed
the appeal.
22. A consent decree would not serve as an estoppel, where the
compromise was vitiated by fraud, misrepresentation, or mistake. The
Court in exercise of its inherent power may rectify the consent decree to ensure
that it is free from clerical or arithmetical errors so as to bring it in conformity
with the terms of the compromise. Undoubtedly, the Court can entertain an
application under Section 151CPC for alterations/modification of the consent
decree if the same is vitiated by fraud, misrepresentation, or misunderstanding.
(emphasis added)
41) While Mr. Damle contends that the principle of estoppel
applies and the Respondent No. 1 Society could not have filed application
for deemed conveyance after the consent decree, Mr. Khandeparkar has
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relied on the judgment of this Court in Prestige Garden A-1 CHSL (supra)
in support of his contention that the principle of estoppel has no
application against provisions of a statute. He contends that if MOFA
creates a remedy under Section 11 in favour of the Society upon occasion
of ‘failure’ by the developer, the Society cannot be estopped from
exercising that remedy as provisions of Section 16 of MOFA creates an
overriding effect over any private arrangement between the parties. It is
Society’s contention that the scheme of MOFA does not permit a
promoter/developer to seek back portion of the conveyed land. In my
view, it is not necessary to delve deeper into the issue of application of
principle of estoppel. As of now, this Court is not concerned with the
issue as to whether the compromise leading to consent decree is lawful or
not. That issue would arise when the Petitioners’ application for
execution would seek execution of the consent decree for lease of portion
of the conveyed land is decided. Suffice it to observe that in a given case
where a cooperative housing society had acted on the certificate of
unilateral deemed conveyance by registering Deed of Conveyance for
lesser area of land, this Court in Prestige Garden A-1 CHSL still
permitted the society to challenge the order of deemed conveyance for
seeking conveyance of higher area of land by holding that there cannot be
estoppel against a statute.
42) Ordinarily, what Mr. Khandeparkar contends could have been
accepted if the arrangement between the parties was in the form of a
mere agreement. In that case, provisions of Section 16 of MOFA would
have nullified the agreement between the parties upon being
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demonstrated that the same is contrary to the provisions of MOFA and
mere act of the Society in entering into the agreement would not have
acted as estoppel. In judgment of this Court in Paramanand Builders LLP
(supra) relied upon by Mr. Khandeparkar, this Court has held that internal
arrangement between the parties cannot nullify the mandate of Section
11 of MOFA. However, in the present case, parties have filed the
agreement in the Court and have obtained imprimatur of the Court
thereon. In the present case there is no adjudication of rights and
liabilities by the City Civil Court. It has merely recorded compromise
between the parties and has put its seal on the private agreement. It is
only the imprimatur of the court on the agreement which stops the Court
from declaring, in these proceedings, that provisions of MOFA would
override the private arrangement made between the parties. That
declaration needs to be sought in appropriate proceedings. Respondent
No. 1 Society can either raise that defence before the Executing Court (if
permissible) or it can adopt separate proceedings for seeking a
declaration that the compromise is not lawful.
SEQUENTIAL PERFORMANCES UNDER THE CONSENT DECREE
43) Under the Consent Terms, the reciprocal performances
agreed are sequential. Clause 6 of the Consent Terms begin with the
expression ‘Consequent upon to the fulfilment of its obligations by the
Defendants no. 1, in terms of clause (2), (3) and (4) above ‘. Therefore, the
first act agreed and undertaken as per the Consent Terms was to be
performed by the Petitioner No. 1, who was to first convey the land in
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favour of the society. The second act was again for Petitioner No. 1 to
perform where it was supposed to register the conveyance deed within 30
days. The third act was once again for the Petitioner No. 1 to perform
where it was required to carry out, within 6 months, the work of repairs of
leakages and the painting of the five wings of Orchid Enclave Building,
replace/install electric poles in the garden on complex. It is only after the
first, the second and the third acts were performed by the Petitioner No. 1
that the Respondent No. 1 Society was supposed to execute the lease of
portion of land in favour of the entity Nahar Builders and Developers Ltd.
44) It is an admitted position that none of the said three acts are
performed by the Petitioner No. 1. Therefore, no occasion arose for
Respondent No. 1 to execute the lease. Since performance of the first act
itself did not occur, the Society was required to seek remedy under
Section 11 of MOFA to get conveyance executed in its favour. It is only
after the conveyance was sought from the Competent Authority that the
Petitioners thought of filing Application for Execution. As of now, only
first part of the performance under the consent decree has taken place. If
Petitioners believe that they are entitled to secure lease of portion of
conveyed land, it will be for them to secure the same in execution
proceedings as the Authority under Section 11 of MOFA is not competent
to grant that relief in favour of Petitioners. Similarly, if Respondent No.1-
Society believes that the scheme of MOFA does not permit the promoter
to seek back portion of the conveyed land, it will have to adopt
appropriate proceedings seeking such a declaration or it can defend
execution proceedings by taking that defence, if permissible in law.
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Considering the unique statutory scheme of MOFA, it is difficult to hold
that the remedy of Respondent No. 1 Society under Section 11(3) of
MOFA is barred even where the promoter has failed to convey the land
despite passage of more than 12 years of the parties entering into consent
terms.
OBJECTIVE OF PETITIONERS
45) As observed above, the whole objective behind challenging
the Order of deemed conveyance by the Petitioners is to ensure that the
Society does not receive the conveyance of its due land entitlement. Apart
from delaying the conveyance for eternity, the Petitioner-developers
want to retain with themselves the land meant for common amenity
spaces to be used by the residents of the building. Thus, after milking the
entire development potential in the layout land, Petitioners desire that
they must receive lease of land on which Society’s common amenities
such as club house, swimming pool, etc are located. The FSI/BUA for
construction of buildings of Respondent No. 1 Society has also arisen out
of the land admeasuring 3546.31 sq.m. It would need that land for
sustenance of its building. As observed above, whether a compromise for
leasing back portion of conveyed land in favour of the developer is lawful
within the meaning of Order XXIII Rule 3 of the Code of Civil Procedure
1908 (CPC) is something which would be decided in appropriate
proceedings. Petitioners’ remedy of seeking lease of land admeasuring
3546.31 sq.m. is not barred on account of passing of the impugned order
by the Competent Authority. In such circumstances, the objective of the
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Petitioners in avoiding conveyance of land in favour of Respondent No.1
Society by raising technical objection needs to be appreciated and the
order of the Competent Authority conveying land due to Respondent No.1
Society need not be disturbed.
IS THIS A CASE FOR THIS COURT TO EXERCISE EXTRAORDINARY JURISDICTION
UNDER ARTICLE 227?
46) Present is a case where Petitioner No.1-developer has acted
in gross violation of provisions of MOFA. It has failed to perform the
statutory obligations of conveying the land and the building in favour of
the Society. From its conduct, it is more than apparent that it has avoided
to execute conveyance in favour of the Society. It first made Respondent
No.1-Society approach City Civil Court by filing a suit. Even after the
consent decree, it took no steps for 12 long years to act on the said
Consent Terms. Now the Petitioners take a very specious stand that
Respondent No.1-Society ought to have exercised the remedy of seeking
execution of the consent decree. The objective behind taking this stand is
more than obvious viz. to embroil Respondent No.1-Society in another
round of lengthy litigation. Whether this Court can be a party to such
oblique objective of the developer is the question. The answer, to my
mind, appears to be in emphatic negative. This Court would not permit its
extraordinary jurisdiction under Article 227 to be misused by a party like
the Petitioner whose only objective is to somehow avoid grant of
conveyance of land and building in favour of the Society and to retain
control over the same for eternity. Far from assisting such a developer,
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this Court would in fact come down heavily on such tendencies and would
refuse to allow its jurisdiction to be misused for perpetuating unlawful
gain. The extraordinary jurisdiction under Section 227 need not be
exercised by the High Court to correct every error of law and fact when
the final finding is found to be justified or found to be supported. In this
regard, reference can be made to the judgment of the Apex Court in
Garment Crafts vs. Prakash Chand Goel9 in which it has held in para-15
as under:
15. Having heard the counsel for the parties, we are clearly of the view that the
impugned order [Prakash Chand Goel v. Garment Craft, 2019 SCC OnLine Del
11943] is contrary to law and cannot be sustained for several reasons, but
primarily for deviation from the limited jurisdiction exercised by the High Court
under Article 227 of the Constitution of India. The High Court exercising
supervisory jurisdiction does not act as a court of first appeal to reappreciate,
reweigh the evidence or facts upon which the determination under challenge is
based. Supervisory jurisdiction is not to correct every error of fact or even a
legal flaw when the final finding is justified or can be supported. The High Court
is not to substitute its own decision on facts and conclusion, for that of the
inferior court or tribunal. [Celina Coelho Pereira v. Ulhas Mahabaleshwar
Kholkar, (2010) 1 SCC 217] The jurisdiction exercised is in the nature of
correctional jurisdiction to set right grave dereliction of duty or flagrant abuse,
violation of fundamental principles of law or justice. The power under Article
227 is exercised sparingly in appropriate cases, like when there is no evidence at
all to justify, or the finding is so perverse that no reasonable person can possibly
come to such a conclusion that the court or tribunal has come to. It is axiomatic
that such discretionary relief must be exercised to ensure there is no
miscarriage of justice.
47) In the facts of the present case, this Court is ultimately
satisfied that Respondent No.1-Society is rightly conveyed land
admeasuring 13,578.293 sq.m. (as against the land agreed to be conveyed of
13,629.84 sq.m. under the consent terms). Therefore, the impugned order
of the Competent Authority need not be interfered with by entertaining
9
(2022) 4 SCC 181
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technical objections sought to be raised by the Petitioners that the
Respondent No.1-Society must file execution proceedings for execution
of the consent decree.
48) It is also well-settled principle that when extraordinary
jurisdiction of High Court is invoked, Petitioner must show that the
justice is on his side. Useful reference in this regard can be made to the
observations of the Chief Justice M. C. Chagla of this Court, speaking for
the Division Bench in State of Bombay vs. Morarji Cooverji 10, in which it
is held as under:
42. … This is, on the contrary, a case where the premises requisitioned for a
public purpose are occupied by a Government servant and are sought to be
taken possession of by the landlord by asking the Court to throw the
Government servant out and restore possession to the landlord when that
landlord has never shown its need of those premises by occupying them himself.
Therefore, this is clearly a case where justice is not on the side of the
petitioner, it is on the side of the State, and we see no reason why we
should grant any relief to the petitioner.
***
44. With respect to the learned Judge, the matter is much more serious than
merely the question of this particular vacancy of 1956 not being relevant to the
vacancy which is the subject-matter of the requisition order. On a writ
petition, as we have already said, the petitioner has not merely to show
good faith, but he has not to suppress any facts and has also to show that
justice lies on its side. If the learned Judge had taken these circumstances into
consideration and then had come to the conclusion that the discretion should
be exercised in favour of the landlord, then undoubtedly we would not have
interfered with the order passed by the learned Judge.
(emphasis added)
49) In M.P. Mittal Versus. State of Haryana11, the Apex Court
has held that while exercising jurisdiction under Article 226 of
10
1958 SCC OnLine Bom 188
11
(1984) 4 SCC 371
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Constitution of India, it is open to the High Court to consider whether it
should decline relief to a Petitioner if grant of relief would defeat the
interest of justice. The Court can always refuse relief if Petitioners seek
to invoke jurisdiction in order to secure dishonest advantage or to
perpetuate an unjust gain. It has been held by the Apex Court in para-5 as
under:
5. Now there is no dispute that the appellant knowingly and deliberately
entered into the guarantee agreement and is liable as guarantor to make
payment of the dividend due from Messrs Depro Foods Limited. Nor is it
disputed that the amount due, with interest, stands at Rs 2,02,166–in respect of
the period ending with the year 1977. It was not contended that the appellant in
fact does not possess sufficient funds or cannot avail of sufficient personal
property for the purpose of discharging the liability. The record also shows that
before instituting coercive proceedings, the Assistant Collector provided the
appellant an opportunity to pay up the amount due from him and that the
appellant made no attempt to discharge the liability. When that is so, we are of
opinion that he is not entitled to relief in these proceedings. The appeal arises
out of a writ petition and it is well-settled that when a petitioner invokes
the jurisdiction of the High Court under Article 226 of the Constitution, it
is open to the High Court to consider whether, in the exercise of its
undoubted discretionary jurisdiction, it should decline relief to such
petitioner if the grant of relief would defeat the interests of justice. The
court always has power to refuse relief where the petitioner seeks to
invoke its writ jurisdiction in order to secure a dishonest advantage or
perpetuate an unjust gain. This is a case where the High Court was fully
justified in refusing relief. On that ground alone, the appeal must fail.
(emphasis added)
50) Therefore, in the facts and circumstances of the present case,
I am not inclined to exercise jurisdiction in favour of the Petitioner to
interfere in the impugned order passed by the Competent Authority. The
judgment obviously is not to be read to mean that in every case where
there is a decree of Civil Court, the Competent Authority can exercise
jurisdiction under Section 11(3) of MOFA or can pass order contrary to the
decree. The judgment is rendered in unique facts and circumstances of
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the present case where there is gross failure on the part of the promoter
to convey land, the conveyed land is within the limits of agreement under
the Consent Terms and the remedy of the Petitioners to have the lease
executed in their favour is not barred.
JUDGMENTS RELIED ON BY PETITIONERS
51) Mr. Damle has also relied upon judgment of the Apex Court
in S. Malla Reddy (supra) in support of his plea of res judicata. The
judgment however is an authority on the proposition that parties cannot
repeatedly file proceedings in a different form by quoting different
provisions of law for the same relief which was negatived earlier. The
judgment is rendered in the unique facts of the case where the Defendant
therein had initially admitted Plaintiff’s claim in the written statement
and later filed two applications for striking off the admission in the
written statement (Order VI Rule 16 CPC) and for seeking permission to
file detailed written statement (Order VIII Rule 9 CPC) after changing the
advocate. Both applications were dismissed and the dismissal attained
finality till the Apex Court. Thereafter, the Defendant therein filed
application for amendment of written statement (Order VI Rule 17 CPC),
which was allowed by the Trial Court. In these peculiar facts, the Apex
Court held that the Defendant therein could not have filed repeated
applications for same relief. The Apex Court upheld the Order of the High
Court dismissing the application for amendment of written statement.
The law enunciated by the Apex Court in S. Malla Reddy does not apply
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in the facts and circumstances of the present case as Respondent No.1’s
plea for conveyance has never been rejected in the earlier proceedings.
52) The judgment in Sanu Enterprises (supra) involved case of
filing of second application for deemed conveyance after rejection of the
first application by the Competent Authority, which is not the factual
situation in the present case. Therefore, ratio the judgment is
inapplicable to the facts of the present case.
CONCLUSION AND ORDER
53) Considering the overall conspectus of the case, I am of the
view that no interference is warranted in the impugned order of deemed
conveyance which appears, to my mind, as unexceptionable. Writ Petition
is devoid of merits. It is accordingly dismissed with no order as to costs.
It is however clarified that observations made by this Court in the
judgment shall not come in the way of parties exercising their respective
remedies in relation to consent decree.
[SANDEEP V. MARNE, J.]
54) After the judgment is pronounced, the learned counsel
appearing for Petitioner seeks continuation of ad-interim order passed on
5 May 2026. The request is opposed by the learned counsel appearing for
the first Respondent-society. Considering the nature of findings recorded
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in the judgment, I am not inclined to continue the stay. The request is
accordingly rejected.
[SANDEEP V. MARNE, J.]
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2026.07.28
20:56:27
+0530
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