MUMBAI: Bombay High Court on Monday said granting deemed conveyance to a housing society does not bar the civic body from taking action against the unauthorised structure, but it would enable the society to pursue its rights to seek regularisation.
Bandra‘s ALJ Residency Cooperative Housing Society (CHS) Ltd petitioned the high court in 2018 against the order of a deputy registrar of cooperative societies who had rejected its plea for a unilateral deemed conveyance certificate.
After hearing lawyers Mayur Khandeparkar and Tushar Gujjar for the housing society, the high court said the flat purchasers were “caught in a vicious circle where though they were put in possession of their flats under validly registered MOFA agreements”, since the builder did not comply with his obligations to ensure an OC, they could not apply for regularisation either.
A deemed conveyance renders rights, title, and obligations on them as owners of the plot and building.
The pivotal issue before the high court was whether the building’s illegality would impair the right of the society for deemed conveyance under provisions of the Maharashtra Ownership of Flats Act (MOFA). The high court said the illegality would not impair such a right.
The high court said it agreed with Khandeparkar that the “flat purchasers cannot be put to a disadvantage” because the builder defaulted in getting the OC. It would “amount to putting the premium on the default” committed by the builder, said the high court.
It clarified that such “conveyance does not impart lawfulness to the structure and all that it does is to vest the title of the promoter in the petitioner (the housing society).”
One Abdulla Khan, who passed away in Dec 1976, owned the plot. In 1980, the high court appointed an administrator and in 1993 with the consent of other heirs, a development deal was struck with Bhati Homes, a developer, for redevelopment. In 1998, BMC granted permission to construct with a commencement certificate.
Advocate C K Tripathi for one legal heir and co-owner argued that the society’s application was defective, there was a discrepancy over the plot numbers, building construction was illegal, plans were sanctioned only till the plinth area, and there was “no clarity as to the owners of the property” and hence on the development agreement.
Khandeparkar argued that the registrar is “not required to get into the issue of legality of the… building as there is no bar to grant of deemed conveyance where no OC has been obtained.”
The high court, on analysing the provisions of the MOFA Act, agreed.
The court, in its judgment, said, “The non-compliance of the statutory obligations by the promoter cannot place fetters on the statutory right of the flat purchasers to the conveyance of the promoter’s right, title and interest in the property.”
The court, after setting aside the deputy registrar’s Jan 2017 order, remitted the society’s application for the limited purpose of issuing a certificate for execution of unilateral deemed conveyance of the Bandra plot along with the buildings standing on it. This is subject to a self-declaration being filed by the society that after getting the deemed conveyance, the petitioner-society may enter into the agreement for the purpose of redevelopment of the building.
