Sunday 14 December 2014

Whether owner of land is liable to execute sale deed in favour of flat owners under MOFA?


    As indicated above, it is the owners, who had obtained the IOD and commencement 
certificate   from   the   MCGM   and   it   is   through   the   medium   of   the 
Respondent   No.   1   that   they   have   commenced   and   completed   the 
construction.   Therefore, in terms of Section 2(c) of the MOFA, which 
takes within its sweep the person who has caused the construction to be 
the Promoter, the owners can be said to be the Promoters, as they have 
admittedly caused the construction.   It is therefore their obligation to 
see to it that the Society is conveyed what it is entitled to in terms of the 
agreement entered into with the flat purchasers by the Respondent No. 
1, which, in the instant case is the right to get a lease in its favour.  In 

my view, since the owners having abdicated their obligation under the 
MOFA   of   conveying   the   property   to   the   Society,   the   Competent 
Authority has rightly intervened in the matter by passing the impugned 
order.     In   my   view,   the   impugned   order   granting   the   deemed 
conveyance has therefore to be construed in the context of the rights 
the Developer had i.e. the right to get a lease from the owners.  Hence, 
the   impugned   order   cannot   be   faulted   with   on   the   ground   that   the operative part of the order is vague or ambiguous.

WRIT PETITION NO. 9116 OF 2013
IN  THE  HIGH  COURT  OF  JUDICATURE  AT  BOMBAY
CIVIL APPELLATE JURISDICTION

Farhat Co­op Housing Society Ltd

versus



 M/s. Malkani Enterprises

Mumbai 
CORAM
:­ R. M. SAVANT, J.

Pronounced on  :­ SEPTEMBER 23, 2014
Citation; 2014(6) MHLJ 358


The   above   Writ   Petitions,   which   are   cross   Writ   Petitions, 
filed   under   Articles   226   and   227   of   the   Constitution   of   India,   take 
exception to the order dated 6th  May, 2013 passed by the Competent 
Authority   and   District   Deputy   Registrar,   Co­operative   Societies   (3), 
Mumbai, by which order, the application filed by the Petitioner in Writ 
Petition No. 9116 of 2013 for deemed conveyance under Section 11(3) 
of the Maharashtra Ownership of Flats (Regulation of the Promotions of 
ig
Construction, Sale, Management and Transfer) Act, 1963 (hereinafter 
referred   to   as   “the   MOFA”),   came   to   be   allowed   and   resultantly,   the 
unilateral deemed conveyance/assignment of right, title and interest of 
the developers in respect of the land being Plot No. B CTS No. 68/B , 
Mauje   Bandivali,   Taluka   Andheri,   Mumbai   Suburban   District, 
admeasuring 3380.50 sqare meters, came to be granted, however the 
said deemed conveyance was made subject to the final decision in T. E. 
& R. Suit No. 4/4 of 2013 filed by the Respondent Nos. 3 to 11 in the  
said Writ Petition No. 9116 of 2013 against the Respondent No. 1.
3)
Insofar as the Petitioner in Writ Petition No. 9116 of 2013 
is concerned, it is challenging the said order to the extent of it being 
made conditional to the final decision in the said T. E. & R. Suit No. 4/4 
of 2013.  Insofar as the Petitioners in Writ Petition No. 10356 of 2013 
are concerned, they are challenging the said order insofar as it grants 
Page 5 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
deemed conveyance to the Petitioner in Writ Petition No. 9116 of 2013. 
The Petitioner in Writ Petition No. 9116 of 2013 would be hereinafter 
referred   to   as   the   “Society”   and   the   Petitioners   in   Writ   Petition   No. 
10356   of   2013   would   be   referred   to   as   the   “owners”   and   the 
Respondent No. 12 would be referred to as the “Competent Authority” 
for brevities sake.
and can be stated thus:
The factual matrix involved in both the Petitions is common 
ig
4)
The Petitioner in Writ Petition No. 9116 of 2013 is a Co­operative 
Housing   Society   formed   by   the   flat   purchasers   of   the   building 
constructed   by   the   Respondent   No.   1   herein   i.e.   M/s.   Malkani 
Enterprises.     The   said   building   consist   of   two   wings   having   60 
residential   flats.     All   the   flat   purchasers   are   the   members   of   the 
Petitioner Society.
5)
At   this   stage,   it   would   be   necessary   to   refer   to   certain 
antecedent   facts   prior   to   the   construction   of   the   building   by   the 
respondent   No.   1   herein.     Insofar   as   the   plot   of   land,   on   which   the 
building is situated is concerned, the said plot of land is amongst one of 
the lands which were leased out by M/s. Byramjee Jeejibhoy Pvt. Ltd. 
by   a   registered   lease   dated   8 th  May,   1953   to   one   Haji   Esmail   Aziz 
Dathawala, whose estate came to be popularly known as the Dathawala 
Page 6 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Estate (it appears that Dathawala was also known and recognized by 
the   surname   'Malkani').     It   appears   that   between   M/s.   Byramjee 
Jeejibhoy Pvt. Ltd. and the said Haji Esmail Aziz Dathawala, there was 
an   agreement   and   memorandum   of   understanding,   whereby,   it   was 
agreed that Haji Esmail Aziz Dathawala would purchase some portion 
of the lands, which were leased out to him and in consideration was to 
surrender   some   portion   of   the   lands.     The   said   Haji   Esmail   Aziz 
ig
Dathawala expired sometime around 1961­62 leaving behind his wife 
Khatijabai, sons and daughters, who are the Respondent Nos. 3 to 11 in 
the Petition i.e. the “owners”.  It appears that in pursuance of the said 
understanding between the said M/s. Byramjee Jeejibhoy Pvt. Ltd. and 
Haji Esmail Aziz Dathawala, after the death of the said Haji Esmail Aziz 
Dathawala, his widow Khatijabai and his sons and daughters i.e. the 
owners Respondent Nos. 3 to 11 herein executed a deed of conveyance 
dated 27th  June, 1982 and purchased some portion, from lands which 
were numbered as old Survey Nos. 22­1 part, 23­3 part, 23­4 part and 
24­1 part.  It is out of the said old survey numbers that the plot of land, 
of which deemed conveyance is granted is a part.  It is pursuant to the 
said conveyance that in the record of rights, the names of Khatijabai i.e. 
the widow of Haji Esmail Aziz Dathawala and the Respondent Nos. 3 to 
11 came to be entered into as Kabjedars, as per Mutation Entry No. 577 
on 13th September, 1963.  This is how the Respondent Nos. 3 to 11 can 
Page 7 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
which, deemed conveyance has been granted.
It appears that the said Khatijabai and the Respondent Nos. 
6)
be   said   to   have   acquired   title   to   the   land   in   question,   in   respect   of 
3 to 11 being the owners, applied for commencement certificate on 26 th 
December, 1974 to the Municipal Corporation of Greater Mumbai (for 
short “MCGM”) to construct a building on the specially divided plot of 
land bearing CTS No. 68B admeasuring 3375 square meters.  The said 
ig
permission sought was applied in the name of the Respondent No. 6 
herein, who is the son of the said Khatijabai.   The Respondent No. 6 
accordingly submitted plans and specifications.   The MCGM  issued a 
notice of requisition dated 31st  January, 1975, pursuant to which, the 
Respondent   No.   6   furnished   an   undertaking   on   20 th  February,   1975. 
The   MCGM   thereafter   issued   the   IOD   on   21 st  March,   1975   and   the 
commencement certificate dated 7th March, 1975.  It appears that after 
the IOD and the commencement certificate were issued, the owners i.e. 
the Respondent Nos. 3 to 11 found it necessary to induct some third 
party to help and assist them in the construction and completion of the 
building, and accordingly brought in the Respondent No. 2 herein i.e. 
Ibrahim   Essa   as  a   contractor/partner.   The   Respondent  Nos.  3  to  11 
herein, along with the said Ibrahim Essa and Hasam Esmail formed and 
constituted a partnership firm in the name of M/s. Malkani Enterprises 
Page 8 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
i.e. the Respondent No. 1 herein, having two partners i.e. the outsider 
Mr. Ibrahim Essa and Mr. Hasam Esmail Malkani, who is the Respondent 
No. 3 herein.  It is pursuant thereto that the owners i.e. the Respondent 
Nos. 3 to 11 agreed to grant a lease of the plot of land in favour of the 
Respondent No. 1 M/s. Malkani Enterprises, which, as indicated above, 
was   a   partnership   firm   therefore   having   a   separate   legal   entity   and 
having two partners.  Accordingly, the agreement for lease between the 
ig
owners   i.e.   Khatijabai   and   others   and   Ibrahim   Essa   and   another 
(partners   of   M/s.   Malkani   Enterprises),   came   to   be   executed   on   8 th 
March, 1975.  It is pursuant to the said agreement for lease that the said 
M/s.   Malkani   Enterprises   developed   the   said   plot   of   land   and   were 
therefore   the   Developers   insofar   as   the   provisions   of   the   MOFA   are 
concerned.
In the standard agreement for sale, which was printed, the 
7)
same contained a title certificate being Exhibit­A annexed to the said 
agreement, wherein, the Advocate concerned has certified the title of 
M/s. Malkani Enterprises as a Developer and as per the title certificate, 
Khatijabai and others were the Lessors and that there was an agreement 
of lease dated 8th  March, 1975 between the Lessors on one part and 
Ibrahim Essa and another (partners of M/s. Malkani Enterprises) on the 
other part in respect of the plot of land in question i.e. the land bearing 
Page 9 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
CTS No. 68/B.  It appears that simultaneously, standard agreement for 
sale with the flat purchasers under the provisions of the MOFA came to 
be   printed   along   with   title   certificate   issued   on   23 rd  February,   1975, 
which, inter alia, contained recitals and clauses which make it clear that 
M/s. Malkani Enterprises was a partnership firm.   The agreements for 
sale which came to be printed in the year 1975 came to be printed on 
stamp   papers   of   Rs.5/­   and   curiously,   the   same   were   signed   by   the 
ig
Respondent   Nos.   3,   6   and   7   representing   the   said   M/s.   Malkani 
Enterprises.  It appears that the building “Farhat” got completed after a 
delay of about 2 years and most of the flats were sold by agreements 
executed   under   the   signatures   of   the   Respondent   Nos.   3,   6   and   7 
singly/jointly in presence of each other under the name of M/s. Malkani 
Enterprises,   without   any  seal   or   stamp  of  the  partnership   firm  or  as 
partner thereof.
8)
Though the flats in the building were sold on the basis of 
the standard agreement printed in the year 1975, the Respondent Nos. 
3 to 11 being the owners and developers themselves, did not take any 
steps to form a Society of the flat purchasers for about 15 years and 
ultimately,  the  Society  was  formed  by  the  flat  purchasers  themselves 
coming together and was got registered on 21st November, 1988.  In the 
proposal for registration, the Respondent No. 6 herein was shown as the 
Page 10 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Chief Promoter of the Society.  The Respondent Nos. 3 to 6 herein, after 
the Society was formed, were the Managing Committee Members in the 
first Committee and issued share certificates to the members, however, 
the owners failed to perform their obligations under the MOFA.  Since 
the Respondent Nos. 3 to 6 were not discharging their  duties as the 
Managing   Committee   Members   in   the   interest   of   the   Society,   a   new 
Managing   Committee   took   over   the   Society.     On   account   of   the 
ig
negligence of the Managing Committee, there was no maintenance of 
the building of the Society and at present the building is in a bad shape 
and it is the case of the Society that it requires immediate attention.  It 
seems that the Society obtained the report of a Structural Engineer and 
Architect, who advised it to go for reconstruction rather than repairs, 
costing huge funds.  Accordingly, the Managing Committee resolved to 
opt for redevelopment and entered into agreement and memorandum 
of understanding for redevelopment of the property of the Society with 
a   developer.     It   is   in   November,   2012   that   the   Society,   to   facilitate 
redevelopment, applied for deemed conveyance under the provisions of 
Section   11(3)   of   the   MOFA   by   filing   an   application   before   the 
Competent   Authority,   who   is   the   authority   appointed   by   the   State 
Government for the same.
9)
It was the case of the Society in the said application that it 
was a registered Co­operative Society and the building of the Society 
Page 11 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
has two wings 'A' and 'B' having 30 flats each and total 60 members of 
the  Society.   It was further averred  that the  agreement with the  flat 
purchasers   were   under   the   MOFA   and   in   terms   of   the   MOFA,   the 
Respondents to the said application have not fulfilled their obligation of 
convening   the   property   to   the   Society   within   four   months   of   the 
registration of the Society.  The Society highlighted clause No. 25 in the 
flat   purchasers   agreement,   a   copy   of   one   of   such   agreements   was 
ig
produced before the authority.  In terms of the said clause 25, it was the 
case of the Society that the Society was entitled to the lease from the 
Respondents.  It was further averred that though the Society has issued 
notices to the Respondents on 8th  December, 2006 and 13th  December, 
2006 calling upon them to fulfill their obligation under the MOFA, they 
have   failed   to   do   so   and   therefore,   the   Society   was   left   with   no 
alternative but to file the said application.  The fact that the Society has 
filed   a   criminal   case   against   the   Respondents   for   not   fulfilling   their 
obligation   to   convey   the   property   was   also   mentioned   in   the   said 
application.
10)
Pursuant to the said application, notices came to be issued 
by   the   Competent   Authority   to   all   the   Respondents   and   also   to   the 
public at large, by publishing the said notices in the local newspapers. 
It appears that initially the Respondent Nos. 1 to 11 were represented 
Page 12 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
by the same Advocate and did not take any steps to file their Written 
Statement or reply to the said application filed by the Society.  It is after 
the   commencement  of   the   proceedings   under   Section   11(3)   that   the 
owners, through their Advocate, issued a notice dated 24 rd  November, 
2012 to the Respondent No. 1 i.e. M/s. Malkani Enterprises, terminating 
the monthly tenancy in respect of the open plot of land, on which the 
building with the Society is situated, on the ground of arrears of rent for 
ig
about 20 years.   A copy of the said notice was also endorsed to the 
Society,   however,   significantly   without   making   any   grievance   or 
allegation of whatsoever nature against the Society.   After the  notice 
period  was  over, the  Respondent  Nos.  3  to  11  filed  an  Eviction  Suit 
being No. T. E. & R. Suit No. 4/4 of 2013 in the Small Causes Court at 
Bandra, Mumbai, against the Respondent No. 1 for possession of the 
plot of land in question, on the ground of breach of the conditions of 
the lease in the matter of non payment of the lease rent.
11)
In the said Suit, it appears that writ of summons came to be 
issued   upon   the   Respondent   No.   1   herein   and   thereafter,   the 
Respondent   Nos.   3   to   11   filed   an   application   for   stay   against   the 
Respondent   No.   1.     It   is   after   filing   of   the   said   Eviction   Suit   that   a 
Written Statement came to be filed on behalf of the Respondent Nos. 3 
to   11   in   the   deemed   conveyance   proceedings.    It   was   stated   in   the 
Page 13 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Written Statement that the Respondent No. 2 has expired, however, no 
efforts have been made to bring his legal heirs on record.  It was stated 
that the necessary documents as per Circular dated 2 nd November, 2010 
and 28th February, 2011 have not been produced.  It was stated that the 
application is not in the prescribed Form No. VII.  It was further stated 
that the Respondent No. 1 M/s. Malkani Enterprises has constructed the 
building known as Farhat and the applicant Society has been registered 
ig
in  the  year  1988.   It  was stated that the  applicant Society has been 
informed that the property is given on monthly tenancy of Rs. 1750/­ to 
the Respondent No. 1.   It was further stated that the Society has not 
paid   rent   to   the   Respondent   Nos.   3   to   11.     It   was   stated   that   the 
Respondents have cancelled the tenancy and that they have filed a Suit 
in   the   Small   Causes   Court   against   the   Respondent   No.   1   and   the 
application is therefore liable to be dismissed.
12)
In the said proceedings, one Mushtaq H. Malkani, the son 
of   the   Respondent   No.   3   and   claiming   to   be   the   partner/authorized 
signatory   of   the   Respondent   No.   1,   appeared   before   the   Competent 
Authority and filed an application for being permitted to file a Written 
Statement.     The   said   application   was   opposed   to   on   behalf   of   the 
Society.     It   appears   that   inspite   of   the   opposition   of   the   Petitioner 
Society   to   the   intervention   of   the   said   Mushtaq   H.   Malkani,   his 
Page 14 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
application  was   entertained  by   the   Competent   Authority   and   he  was 
permitted to file his Written Statement.  The said Mushtaq H. Malkani 
filed the Written Statement on behalf of the Respondent No. 1 herein. 
It was stated in the Written Statement that the Respondent Nos. 3 to 11 
have cancelled the tenancy of the Respondent No. 1 by a letter dated 
24th November, 2012, copy of which was also endorsed to the Society.  It 
was further stated in the said Written Statement that the Society i.e. the 
ig
applicant has not paid the lease rent and that the Respondent No. 1, 
after   the   said   termination,   has   no   right   of   any   nature   in   the   said 
property.   It was stated that the Respondent Nos. 3 to 11 have filed a 
Suit for eviction, for recovery of arrears of rent in the preceding three 
years  together   with   interest  at   15%   till  disposal   of   the  Suit.     It   was 
stated that since the Suit is pending, the claim made in the application 
cannot be granted.  It was also stated that the applicant Society has not 
produced necessary documents and that whatever documents have been 
produced are not authenticated as required by the rules.  It was further 
stated that the property is not in possession of the Society and that the 
Respondent   No.   1   has   never   agreed   to   transfer/convey   the   lease   in 
respect of the said property to the applicant Society.   It was therefore 
prayed that the application be dismissed.
13)
The Society in turn filed its reply to the Written Statements 
filed on behalf of the Respondents.  It was stated in the said reply by the 
Page 15 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Society that the Developers and owners are one and the same party. 
The Society stated that the plot is not vacant and that there is a building 
thereon.   It was further stated that the said fact has been suppressed 
from the  Small Causes Court, wherein, the Respondent Nos. 3 to 11 
have filed a Suit.  The Society questioned the maintainability of the Suit 
on   the   ground   that   such   a   Suit   was   not   maintainable   under   the 
provisions of the Maharashtra Rent Control Act, 1999.   The Society in 
ig
its reply traced how the owners had acquired title.   The Society also 
stated   that   the   commencement   certificate   has   been   obtained   by   one 
Abdul Sattar on behalf of the owner Khatijabai and the undertaking to 
the MCGM has also been given by Abdul Sattar.   The Society pointed 
out that the flat agreements could not be registered earlier in view of 
the non co­operation of the owners, but have been registered later on 
under   the   Amnesty   Scheme.     It   was   stated   that   the   proposal   for 
formation of the Society has been signed by the land owners as different 
Promoter and that the Respondent No. 6, who is from the family of the 
land owners was the Chairman of the Society for a long time.
14)
To the reply filed by the Society, the Respondent Nos. 3 to 
11 filed their rejoinder, wherein, the sum and substance was that the 
entertaining   the   application   filed   by   the   Society   would   amount   to 
interfering  with   the   proceedings   pending   in   the   Small   Causes  Court. 
Page 16 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
The application for deemed conveyance was heard on 4 th  April, 2013 
and inspite of the objection of the Society to the filing of the pleadings 
on behalf of the Respondent No. 1 on account of non verification of 
pleadings and the locus standi of the Respondent No. 1, the Competent 
Authority overruled the said objections and closed the matter for orders. 
It is thereafter that the impugned order came to be passed on 6 th May, 
2013, by which order, as indicated above, the application for deemed 
ig
conveyance   was   allowed   by   the   Competent   Authority,   however,   the 
same was made subject to the final decision in T. E. & R. Suit No. 4/4 of 
2013.   The Competent Authority, whilst allowing the application, has 
inter   alia  held   that   the   applicant   Society   has   complied   with   the 
requirement   by   filing   the   necessary   documents.     The   Competent 
Authority held that in view thereof, there is no propriety in the said 
technical   defects,   which   are   sought   to   be   highlighted   by   the 
Respondents.   The Competent Authority held that the flats have been 
sold under agreements on ownership basis to different persons by the 
Respondent No. 1 and that the said agreements are executed under the 
MOFA.  The Competent Authority held that in view thereof, the rights in 
the said property have been transferred from the land owners to the 
applicant Society.   The Competent Authority held that the full FSI has 
been utilised to construct a building having six floors.  The Competent 
Authority adverted to clause 25 of the flat purchasers' agreement and in 
Page 17 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
view   thereof,   held   that   the   Society   of   the   flat   purchasers   would   be 
entitled   to   the   lease   being   executed   in   favour   of   the   Society   by   the 
Respondents.     The   Competent   Authority   held   that   the   same   was 
required to be done within four months of the registration of the Society 
but has not been done till date, though the Society has been registered 
on   21st  November,   1988.     The   Competent   Authority   held   that   the 
Respondent Nos. 3 to 11 are required to execute a lease agreement in 
ig
favour of the Society and that it was the obligation of the Developer 
under the MOFA to transfer/convey the lease rights in respect of the 
plot of land in favour of the Society.  The Competent Authority held that 
the Respondents cannot avoid their  statutory obligation  and that the 
Respondent Nos. 1 to 11 are all Developers and are obliged to comply 
with   clause   25   of   the   flat   purchasers   agreement.     The   Competent 
Authority,   however,   thereafter,   by   observing   that   since   the   Suit   is 
pending in the Small Causes Court, the order of deemed conveyance 
would have to be passed making it subject to the final decision of the 
said   Suit   and   accordingly   passed   an   order   to   the   said   effect.     As 
indicated above, it is the said order, which is impugned in the present 
Petitions.
15)
Heard the learned Counsel appearing for the parties.
Page 18 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
16)
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. R.M. KADAM FOR THE PETITIONER IN WP/9116/2013:
(i)
That   the  Competent   Authority,   after   allowing   the 
application for deemed conveyance filed by the Petitioner Society has 
thereafter   erred   in   making   the   deemed   conveyance   conditional   i.e. 
making it subject to the result of the Suit being T. E. & R. Suit No. 4/4 
of 2013, thereby rendering the order ineffective.
That   the  Competent   Authority  failed   to   appreciate 
(ii)
ig
that   the   Suit   filed   by   the   Respondent   Nos.   3   to   11   against   the 
Respondent No. 1 was a collusive Suit, and was also filed malafide so as 
to   frustrate   the   application   for   deemed   conveyance   filed   by   the 
Petitioner Society.
(iii)
That   the   application   filed   for   deemed   conveyance 
against the Respondent Nos. 3 to 11 i.e. the owners was maintainable in 
view   of   the   fact   that   the   owners   can   be   said   to   have   caused   the 
development   by   agreeing   to   grant   a   lease   to   the   Respondent   No.   1, 
which is a partnership firm of the owners themselves.
(iv)
That   the   Respondent   No.   1   is   a   partnership   firm 
where one of the partners is belonging to the family of the Respondent 
Nos. 3 to 11 and since there is an Agreement to Lease in favour of the 
Respondent   No.   1  from  the   Respondent  Nos.   3  to   11,  the  Society   is 
entitled to get the right of the Respondent No. 1 conveyed in its favour.
Page 19 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
(v)
WP.9116.10356.Judgment.doc
Since   the   owners   can   be   said   to   have   caused   the 
development, the Petitioner is entitled to a deemed conveyance of the 
owners' rights in respect of the plot of land in question, having regard to 
the definition of Promoter/Developer in the MOFA.
(vi)
That   the   Society   cannot   be   deprived   of   its 
entitlement for deemed conveyance on the ground that – Respondent 
ig
No. 1 who is the developer had only a right to an Agreement to Lease.
(vii) That   there   is   a   compliance   of   rules   insofar   as   the 
filing  of   the  application  for  deemed conveyance  is  concerned,  as the 
Competent   Authority  has   observed   so   in   the   impugned   order   and 
therefore the contentions urged on behalf of the Respondents that the 
application was incomplete cannot be accepted.
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. M.R. SATHE FOR THE PETITIONERS IN WP/10356/2013:
17)
(i)
That the Competent Authority has erred in granting 
deemed conveyance to the Petitioner Society when there is no privity of 
contract between the Petitioner Society and the Respondent Nos. 3 to 
11.
(ii)
That the application filed by the Petitioner Society is 
incomplete   as   the   MOFA   agreements   were   not   annexed   to   the 
application   nor   is   the   statement   filed   along   with   the   application   in 
Page 20 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
respect   of   the   various   flat   purchasers   complete   and   therefore,   the 
In   terms   of   the   Section   11(1)   of   the   MOFA,   the 
(iii)
Competent Authority has erred in entertaining the said application.
deemed   conveyance   has   to   be   in   respect   of   the   rights   of   the 
Promoters/Developers   in   the   plot   of   land.     In   the   instant   case,   the 
Developer i.e. the Respondent No. 1 has only an Agreement to Lease in 
his favour, whereby, the Respondent Nos. 3 to 11 have agreed to grant 
ig
lease to it, however, till such time, as lease is executed, the Respondent 
No. 1 is a monthly tenant and therefore, at the highest the Petitioner 
Society would therefore have the right to monthly tenancy.
That   the   impugned   order   discloses   that   the 
(iv)
Competent Authority was not sure as in respect of which right of the 
Promoter/Developer deemed conveyance is granted and therefore, the 
direction   in   the   operative   part   of   the   impugned   order   contains 
alternatives.     This   could   not   have   been   done   by   the  Competent 
Authority whilst exercising the power under Section 11, as the deemed 
conveyance has to be granted in respect of an ascertainable right, which 
is in the Developer/Promoter.
(v)
Since the Respondent No. 1 is a monthly tenant, the 
Petitioner Society could only be entitled to the right of the Respondent 
Page 21 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
deemed conveyance of the assignment of the lease.
That   though   the   Respondent   No.   2   had   expired, 
(vi)
No. 1 namely the monthly tenancy and could not have been given the 
which fact was brought to the notice of the Advocate appearing for the 
Society, the application was not amended so as to bring his heirs on 
record.  The impugned order is therefore passed against a dead person 
ig
and therefore a nullity.
18)
(i)
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. A.Y.SAKHARE FOR THE RESPONDENT NO. 1 IN WP/9116/13:
The   learned   Senior   Counsel   appearing   for   the 
Respondent   No.   1   reiterated   the   submissions   urged   on   behalf   of   the 
Respondent   Nos.   3   to   11   as   regards   the   incompleteness   of   the 
application   filed   by   the   Petitioner   Society   under   Section   11   of   the 
MOFA.   The learned Senior Counsel sought to point out the rationale 
behind   the   documents   which   are   to   be   submitted   along   with   the 
application   for   deemed   conveyance   and   which   are   mentioned   in   the 
circular dated 21st March, 2011 issued by the Competent Authority.
(ii)
He further submitted that the Competent Authority 
could   have   granted   deemed   conveyance   only   of   a   ascertainable 
right/interest of the Promoter/Developer and could not have passed the 
order which can be said to be vague insofar as the subject matter of 
Page 22 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
deemed conveyance, as in the operative part, the Competent Authority 
has mentioned alternatives.
19)
CONSIDERATION:
Before proceeding to deal with the issues which arise in the 
light   of   the   contentions   urged   on   behalf   of   the   parties,   it   would   be 
apposite   to   refer   to   the   objects   and   reasons   behind   introducing   the 
amendments in the MOFA and especially Section 5A i.e. to setup the 
ig
machinery of the Competent Authority for the purposes of exercising 
powers   and   performing   the   duties   under   Sections   10   and   11   of   the 
MOFA.  The objects and reasons spell out, that it is on account of sundry 
abuses   and   malpractices,   which   were   on   the   increase   on   account   of 
acute shortage of housing in several parts of the State, that the State felt 
a need to curb the said malpractices and to see to it that the purposes 
for   which   MOFA   was   introduced   were   fulfilled.     It   was   felt   that   the 
provisions of the MOFA were required to be made more effective, so as 
to safeguard the interest of the flat purchasers.  It is with the said intent 
that the amendments were introduced.  The intent being to see to it that 
the Promoters fulfill their obligations under Sections 10 and 11 of the 
MOFA.  The objects and reasons behind introducing the amendment in 
the MOFA read thus:
“ 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.
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 produced 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,
(i)   to   form  a  co­operative  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 Co­operative Societies to register the co­
operative society of such flat owners:
(ii)
to   execute   a   conveyance   within   the 
prescribed period as provided in Section 11, on receiving an 
application   from   the  flat  owner  members   of   a  co­operative 
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.
(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 
Page 24 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
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.”
In the context of the challenge raised in the above Petitions, 
20)
it would be apposite to reproduce Sections 5A, 10 and 11 of the MOFA, 
which read thus:
ig
“5A.   Competent Authority
The State Government may, by notification in the Official 
Gazette, appoint an officer, not below the rank of the District 
Deputy   Registrar   of   Co­operative   Societies,   to   be   the 
Competent Authority, for an area or areas to be specified in 
such   notification   and   different   officers   may   be   appoint   as 
Competent   Authority   for   different   local   areas,   for   the 
purposes of exercising the powers and performing the duties 
under Sections 5, 10 and 11 of this Act.
10.   Promoter to take steps for formation of co­operative 
society or company
[(1)As soon  as a minimum  number of  persons required   to 
form a co­operative society or a company have taken fiats, 
the   promoter  shall  within  the   prescribed   period   submit  an 
application   to   the   Registrar   for   registration   of   the 
organisation of persons who take the flats as a co operative 
society   or,   as   the   case   may   be,   as   a   company;   and   the 
promoter shall join,  in respect  of  the flats  which  have  not 
been   taken,   in   such   application   for   membership   of   a   co­ 
operative   society   or   as   the   case   may   be   of   a   company. 
Nothing in this section shall effect the right’ of the promoter 
to   dispose   of   the   remaining   flats   in   accordance   with   the 
provisions of this Act.
Provided   that,  if   the   promoter   fail   within   the   prescribed 
period   to   submit   an   application   to   the   Registrar   for 
registration   of   society   in   the   manner   provided   in   the 
Maharashtra Co­operative Societies Act, 1960, the Competent 
Authority   may,   upon   receiving   an   application   from   the 
persons who have taken flats from the said promoter, direct 
the District Deputy Registrar, Deputy Registrar or, as the case 
may be, Assistant Registrar concerned, to register the society:
Provided   further   that,  no   such   direction   to   register   any 
society   under   the   preceding   proviso   shall   be   given   to   the 
District Deputy Registrar, Deputy Registrar or, as the case may 
be, Assistant Registrar, by the Competent Authority without 
Page 25 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
first   verifying   authenticity   of   the   applicants   request   and 
giving the concerned promoter a reasonable opportunity of 
being heard.
ig
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 co­operative 
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 sub­section (1).
(3)
If the promoter fails to execute the conveyance in 
favour of the co­operative society formed under Section 10 
or,  as  the case may   be,  the  company   or  the association  of 
apartment owners, as provided by sub­section (1), within the 
prescribed period, the members of such co­operative 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 
Page 26 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
certificate   to   the   Sub­Registrar   of   any   other   appropriate 
Registration   Officer   under   the   Registration   Act,   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.
21)
ig
(5)
On submission by such society or as the case may 
be, the company or the association of apartment owners, to 
the Sub­Registrar or the concerned appropriate Registration 
Officer   appointed   under   the   Registration   Act,   1908,   the 
certificate issued by the Competent Authority along with the 
unilateral instrument of conveyance, the Sub­Registrar or the 
concerned   appropriate   Registration   Officer   shall, 
notwithstanding anything contained in the Registration Act, 
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 a fit case for unilateral conveyance, 
register that instrument as deemed conveyance.
After   having   referred   to   the   aforesaid   provisions   of   the 
MOFA, it would now be necessary to deal with the contentions raised on 
behalf   of   the   parties.     It   is   the   contention   of   the   Petitioners   in   Writ 
Petition No. 10356 of 2013 i.e. the owners that the application filed by 
the Society was not complete inasmuch as the requisite documents were 
not   annexed   and   therefore,   the   application   could   not   have   been 
entertained   by   the   Competent   Authority.     In   support   of   the   said 
contention,   reliance   was   sought   to   be   placed   by   the   owners   on   the 
circular dated 21st  March, 2011, which sets out the documents which 
are   required   to   be   annexed   to   an   application   for   unilateral   deemed 
conveyance.  In the said circular, about 29 documents have been listed. 
A perusal of the impugned order passed by the Competent Authority, 
Page 27 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
however, discloses the  documents, which have been produced by the 
Society   in   the   said   deemed   conveyance   proceedings.     The   said 
documents are the Agreement to Sale entered into with one of the flat 
purchasers,   the   title   certificate,   the   permission   obtained   by   the 
Promoters   for   the   construction   of   the   building.     The   Competent 
Authority   i.e.   the   Respondent   No.   12   herein   also   observed   in   the 
impugned order that the objection raised on behalf of the owners was 
ig
technical and that the matters would have to be looked into from the 
angle of the merits of the application.   The Competent Authority has 
referred to the clause in the Agreement to Sale of the flat purchasers, 
wherein,   it   is   mentioned   that   the   Respondent   No.   1   M/s.   Malkani 
Enterprises has an Agreement to Lease from the owners, which is dated 
8th  March,   1975   and   that   the   lease   rent   payable   to   the   owners   is 
Rs.1750/­ per month.  In the context of the said technical plea raised by 
the   owners,  it   would  also  be   necessary  to  consider   the   Rules,  which 
have   been   framed   under   the   MOFA,   which   rules   are   known   as   the 
Maharashtra  Ownership  of  Flats Rules, 1964.   Insofar as the  present 
Petition is concerned, Rule 13 is relevant Rule, which, for the sake of 
convenience, is reproduced hereinunder:
“13. Scrutiny of applications and notice to the parties, etc.
(1)
Registration of applications.
(a)
On receipt of an application, the office of the 
Competent Authority shall endorse on it the date of its receipt 
and shall as soon as possible, examine it and satisfy itself that 
Page 28 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
the   person   presenting   it   has   authority   to   do   so   and   that   it 
conforms with all the provisions of the Act and the Rules made 
thereunder.
(b)
If the Competent Authority is satisfied that 
the   application   is   complete   in   all   respect,   it   shall   cause   the 
application   to   be   registered,   as   admitted,   in   the   appropriate 
register maintained under these Rules.
(c)
If   the   application   is   not   complete,   the 
Competent Authority may sent notice in the Form VIII, to the 
applicant/s   to   rectify   the   defects   or   comply   with   such 
requirements,   as   it   may   deem   fit   to   conform   with   all   the 
provisions of the Act, and these Rules, within a period of fifteen 
days of the receipt of the said notice.  The Competent Authority 
may, for sufficient cause, may give further extension of not more 
than fifteen days to comply with the requirements.
ig
If the above defect in an application is rectified, the 
Competent Authority shall cause it to be admitted and register 
the application in the appropriate register.
(2)
Maintenance   of   registers   and   procedure   for  
issuing notice, etc.
The   Competent   Authority   shall   maintain   the 
register of applications received by it in Form IX.
On   admitting   the   application,   the   competent 
Authority shall, within a period of fifteen days thereof, issue a 
notice in Form X to the opponent/s requiring him/them to file 
the   written   statement   on   the   day,   date   and   place   as   may   be 
specified therein.  Such notice shall be served on the opponents 
by registered post acknowledgment due or under certificate of 
posting on the last known address.
(3)
Appearance of parties and consequences of non  
appearance.
(a)
On the date fixed as aforesaid, the opponent 
shall   appear   either   in   person   or   through   his   Advocate   or   his 
authorized Representative before the Competent Authority and 
shall file a written statement.
(b)
On   the   date   of   hearing,   if   the   applicant 
appears and the opponent or any of the opponents, does not or 
do   not   appear,  as  the  case   may  be,   the   Competent   Authority 
shall decide the application ex­parte:
Provided   that,   before   deciding   the   Application,   if 
the Opponent appears and shows a sufficient cause for his non­
appearance on the earlier occasions, he shall be heard in the 
matter as if he had appeared before the Competent Authority on 
the first day
(c)
If  on the date fixed   for hearing  or on any 
Page 29 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
ig
other day to which the hearing may be adjourned, the applicant 
does   not   appear   either   in   person   or   by   his   Authorised 
Representative,   when   application   is   called   for   hearing,   the 
Competent Authority may dismiss the application.
(d)
If, on the date fixed for hearing or any other 
day   to   which   the   hearing   may   be   adjourned,   the   Opponent's 
does/do   not   appear   either   in   person   or   through   his/their 
Authorised   Representative,   when   the   Application   is   called   for 
hearing,   the   Competent   Authority   may   decide   the   same   on 
merits   after   hearing   the   Applicant   or   his   Authorised 
Representative, if present
(4)
Production and inspection of documents.
(a)
The parties shall file the documents referred 
to in the pleadings at the time of filling application and written 
statement,   as   the   case   may   be.     If   either   party   satisfies   the 
Competent   Authority   that   any   document   is   relevant   and   the 
same   is   in   the   custody   of   the   opposite   party,   the   Competent 
Authority   may,   by   an   order   in   writing,   direct   such   party   to 
produce such document on the next date of hearing.
(b)
If the party so ordered, fails to produce such 
documents   on   the   next   date   of   hearing,   the   Competent 
Authority may draw adverse inference against such party and 
hearing of the original application shall not be postponed till 
filing   of   such   documents   or   for   the   reasons   of   such   non 
compliance of the order.
(c)
If the Competent Authority is satisfied that 
the   documents   required   to   be   produced,   cannot   be   brought 
before   the   Competent   Authority   for   sufficient   reasons   like   its 
volume or otherwise, the Competent Authority may allow the 
opposite party to take inspection of the documents within seven 
days from the date of order of such inspection.
(d)
If the Competent Authority is satisfied that 
the opponent had no access to the documents earlier and the 
filing of additional statement is necessary, it may allow the filing 
of such additional statement.
(5)
Procedure for hearing the application.
(a)
On receipt of the statement of the opponent, 
the applicant shall prove contents of the application and also 
deal with the contention of defenses.   The opponent likewise 
may file reply in support of the defense on the next date, if he 
so desires.  No cross­examination of any of the parties shall be 
permitted.
(b)
On   receipt   of   the   replies,   the   Competent 
Authority shall proceed to hear oral arguments of the parties 
and after hearing, shall close the proceedings for the order.
(c)
The   Competent   Authority   shall,   within 
Page 30 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
seal.
(6)
reasonable time and in any case not later than six months from 
the date of receipt of the application, after making such enquiry 
deemed   necessary   and   after   verifying   the   authenticity   of   the 
documents submitted by the parties and after hearing them and 
giving the parties sufficient opportunities as required under the 
Act and the principles of natural justice, pass such appropriate 
order as it deems fit, as provided under the Act.
Signing of order and the notice and the official  
(a)
Every Judgment, order and the certificate of 
the   Competent   Authority   shall   be   delivered   or   supplied   or 
provided to all the concerned parties.
22)
ig
(b)
The   Competent   Authority   shall   have   an 
Official Seal of its own, which shall be kept in the custody of the 
Competent Authority.
(c)
Every   judgment,   order,   certificate   and   the 
notice issued under the Act or these Rules shall be signed by the 
Competent Authority and shall bear the official seal on it.
(d)
All the records of the Competent Authority 
shall be kept in its custody.”
The said Rule therefore mandates the Competent Authority 
to   scrutinize   the   application   and   after   being   satisfied   that   the 
application   is   complete   in   all   respects,   cause   the   application   to   be 
registered as admitted in the appropriate register maintained under the 
said Rules.  If the application is not complete, then a notice is required 
to be issued to the applicant to rectify the defects or comply with such 
requirements.     The   aforesaid   Rules   therefore   lay   down   an   elaborate 
procedure   post  filing of  the  application  for  deemed  conveyance upto 
the   stage   of   Judgment   and   Order.     In   the   instant   case,   it   has   been 
observed   by   the   Competent   Authority   that   the   Society   had   complied 
with the requisitions made by the Authority and therefore, it appears 
Page 31 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
that the said application made by the Society was registered and placed 
for adjudication.   In the light of the said Rule 13, it is not possible to 
accept   the   contention   raised     on   behalf   of   the   owners   that   the 
application   was   incomplete   and   therefore   could   not   have   been 
entertained.     As   indicated   above,   it   is   only   after   the   Competent 
Authority   is   satisfied   that   the   application   is   complete   that   the 
application is to be registered as admitted and thereafter to be placed 
ig
for adjudication.  The Competent Authority in the impugned order has 
referred to and in fact has listed the 16 documents which were filed by 
the Society in support of its application.   The said 16 documents, for 
ready reference, are as under:
“1. A notarized application in prescribed form no.7 under   
Rule 12, with Rs.2000/­ court fees stamp;
Copy of Agreement for sale/purchase.
4. Copy of Resolution;
3. List of members
5. 7/12 extract and village form no. 6
6. Property Tax
7. Notice for N. A. tax
8. City Survey map
9. 2. Applicant   Society's   registration   certificate   dated    
           21.11.1988
10. Intimation of Disapproval (I O D) dated 31.1.1975
11. Sanctioned building plan and survey map
12. Building commencement certificate dated 7.3.1975
13. Building completion certificate dated 2.12.1978
14. Vakalatnama
Page 32 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
15. Documents in respect of case no. 102/M/2007 before   
Hon'ble Metropolitan Magistrate, Mumbai
16. Applicant's Affidavit”
 The learned AGP appearing in the matter was asked to produce 
the  record  insofar  as the   said documents  are  concerned, the  learned 
AGP accordingly had produced the record and tendered the photocopies 
of the Agreements to Sale, which were before the Competent Authority. 
Having   regard   to   the   said   documents,   it   cannot   be   said   that   the 
ig
application was incomplete or that the application was lacking in any 
particulars.  In my view, the Competent Authority was right in observing 
that the objection raised on behalf of the owners was technical and the 
matter   had   to   be   looked   into   in   the   context   of   the   merits   of   the 
application, especially having regard to the mandate of the provisions of 
the MOFA.  Hence, insofar as the said contention urged on behalf of the 
owners is concerned, there is no merit in the same.
23)
The   next   issue   that   is  required   to   be   dealt   with   is   as  to 
whether the  Suit being T. E. & R. Suit No. 4/4 of 2013 filed by the 
owners   against   the   Partnership   firm   M/s.   Malkani   Enterprises   is   a 
collusive Suit and therefore, the order of deemed conveyance could not 
have been made subject to the result of the said Suit.  Insofar as the said 
Suit is concerned, the facts which can be said to be germane to the said 
Suit are the following:
Page 33 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
The Respondent No. 1 is a partnership firm, which was entrusted 
the task of carrying out the development of the plot of land in question, 
as the owners had already obtained the IOD and the commencement 
certificate from the MCGM.  One of the members of the owners' family 
is a partner of the said partnership firm i.e. one Abdul Sattar Malkani. 
The   notice   for   termination   has   been   issued   after   the   application   for 
deemed conveyance was filed and it is pertinent to note that the owners 
ig
and the Respondent No. 1 i.e. M/s. Malkani Enterprises had appeared in 
the   said   deemed   conveyance   proceedings,   but   had   not   filed   their 
responses.   The owners and the Respondent No. 1 i.e. the  said M/s. 
Malkani Enterprises were represented by the same lawyer till just before 
issuance of the notice of termination of the lease.  The third fact is that 
the Suit has been filed for eviction of the said M/s. Malkani Enterprises 
and for possession of the open land, without disclosing the factum of 
the construction of the building, the formation of the Petitioner Society 
and the filing of the application for deemed conveyance by the Society. 
The fourth fact is that the Society pertinently has not been made a party 
to the Suit.  The fifth fact, which is required to be noted is that an order 
of injunction has been obtained in the said Suit against the said M/s. 
Malkani   Enterprises   when   the   said   M/s.   Malkani   Enterprises   has 
virtually no rights remaining in the property, after the completion of the 
construction.  The sixth fact is that the owners and the Respondent No.1 
Page 34 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
have a commonality interest, which is substantiated by the fact that the 
Respondent   No.   1   is   a   family   firm,   the   agreements   with   the   flat 
purchasers have been signed by the Respondent Nos. 3, 6 and 7 either 
singly or jointly on behalf of the firm, and they were represented by the 
same   lawyer   in   the   deemed   conveyance   proceedings.     The   aforesaid 
facts are very eloquent and therefore unmistakably lead to an inference 
that the said Suit being T. E. & R. Suit No. 4/4 of 2013 has been filed by 
ig
the   owners   merely   to   put   obstacles   in   the   way   of   the   Society   from 
getting the deemed conveyance.  The said Suit, as indicated above, has 
been filed without disclosing the fact that a building having two wings 
has already been constructed comprising of about 60 flats.  The fact that 
the Respondent No. 1 M/s. Malkani Enterprises has virtually no rights 
remaining in the Suit plot has been conspicuously kept away from the 
Small   Causes   Court   and   an   order   of   injunction   has   been   obtained 
against   it.     Having   regard   to   the   aforesaid   facts,   the   inescapable 
conclusion is that the Suit in question being T. E. & R. Suit No. 4/4 of 
2013 is a collusive Suit between the owners and the Respondent No. 1 
M/s.   Malkani   Enterprises,   filed   with   sole   objective   of   frustrating   the 
application for deemed conveyance filed by the Society.  By making the 
said order contingent upon the decision that would be rendered in the 
Suit, the Competent Authority has virtually made the grant of deemed 
conveyance ineffective.   It is precisely on account of the machinations, 
Page 35 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
which were adopted by the Developers/Promoters to deny the Society 
or condominium of flat purchasers the conveyance of the property that 
the provisions of the MOFA were amended so as to provide for the grant 
of   unilateral   deemed   conveyance.     In   my   view   therefore,   the   order 
passed   by   the   Competent   Authority   of   making   the   grant   of   deemed 
conveyance   subject   to   the   result   of   the   said   Suit   is   therefore 
The   next   issue   is   as   to   what   rights   of   the   Promoter/ 
ig
24)
unsustainable and is required to be quashed and set aside.
Developer is the Society entitled to.  This submission was sought to be 
advanced in view of the directions of the Competent Authority in the 
operative part of the impugned order, wherein, the direction is that the 
Society would be entitled to deemed conveyance/assignment/rights of 
the   Developer   i.e.   the   Respondent   No.1.     Insofar   as   the   rights   and 
interest of which the Society would be entitled to deemed conveyance is 
concerned,   there   can   be   no   gainsaying   that   the   Society   of   the   flat 
purchasers or the condominium of the flat purchasers are entitled to the 
right,   title   and   interest   of   the   Developer/Promoter   (see  Mazda  
Construction Company and Ors. vs. Sultanabad Darshan CHS Ltd. and  
Ors.1)  It was sought to be strenuously urged on behalf of the owners as 
well   as   the   Respondent   No.   1   that   since   the   Respondent   No.   1   is   a 
monthly tenant, the Society at best would be entitled to the conveyance 
1 2013(2) ALL MR 278
Page 36 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
of the monthly tenancy.   Since the agreement with the flat purchasers 
can   be   said   to   be   determinative   as   to   what   the   Society   of   the   flat 
purchasers would be entitled to, it would be apposite to refer to the 
recital and the relevant clause 25 of the said agreement, which was part 
of the record before the Competent Authority, which read thus:
ig
“AND WHEREAS the Flat­holder has taken inspection from the 
Builders of the aforesaid Agreement for Lease dated 8 th March 
1975.   AND   WHEREAS   the   certificate   of   Title   issued   by   the 
Builders   Advocate   has   been   inspected   by   the   Flat­holder   (a 
copy   whereof   is   annexed   as   Ex.A   to   this   Agreement)   AND 
WHEREAS   the   Builders   will   be   selling   the   flats   and   other 
spaces in the said building named “Farhat Apartments' as also 
the open car­parking space, as also the garages (if constructed) 
on what is known as “Ownership Basis” with a view ultimately 
that   the   owners   of   all   the   flats   and   other   spaces   in   such 
Building   and   the   Garages   (if   constructed)   and   open   car­
parking spaces in the compound should form themselves into a 
Co­operative   Society   duly   registered   under   the   Maharashtra 
Co­operative   Society's   Act   1960   (or   ultimately   become 
members of such Society) or they should incorporate a Limited 
Company with themselves as share holders or that they should 
form   a   condominium   (Association)   as   contemplated   by   the 
Maharashtra Apartment Ownership Act (hereinafter referred to 
as   “the   MAO   Act”)   and   upon   the   owners   of   all   flats,   other 
spaces in said Building and the open car­parking spaces and 
garages   (if   constructed)   in   the   compound   paying   in   full   all 
their   respective   dues   payable   to   the   Builders   and   strictly 
complying with all the terms and conditions of their respective 
agreements   with   the   Builders   (in   a   form   similar   to   this 
Agreement) the Builders shall obtain directly from the Lessors 
(and   if   necessary,   themselves   join   in)   in   necessary   Lease   in 
favour of such Co­operative Society or a Limited Company or 
Association   (as   the   case   may   be)   AND   WHEREAS   the   Flat­
holder has agreed to acquire from the Builders Flat No. 3 on 
the ground floor of the building named “Farhat Apartments” 
and compound (hereinafter referred to as “the said premises”) 
with     notice   of   the   terms   and   conditions   and   provisions 
contained   in   the   documents   referred   to   hereinabove   and 
subject to the terms and conditions hereinafter contained.
.................
25. On the completion of the said building and garages (if 
Page 37 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Hence, the Respondent No. 1, who is the Developer has an 
25)
ig
any) and on receipt of by the Builders of the full payment of all 
the amounts due and payable to them by all the Flatholders of 
the said building and car parking spaces and garages (if any), 
the builders shall co­operate with the Flat holder in forming, 
registering or incorporating a Co­operative Society or Limtied 
Company or any Association the rights of members of the Co­
operative   Society   or   of   the   Limited   Company   or   of   the 
Association as the case may be, being subject to the rights of 
the   Builders   under   this   Agreement   and   the   Lease   to   be 
executed in pursuance hereof, when the Co­operative Society 
or   Limited   Company   or   Association   is   registered   or 
incorporated   or   formed,   as   the   case   may   be,   and   all   the 
amounts due and payable to the Builders in respect of all the 
flats and other portions of the said building and the garages (if 
constructed)   and   car   parking   spaces   are   paid   in   full   as 
aforesaid,   the   Builders   shall   obtain   and/or   execute   the 
necessary Lease of the said land and building in favour of such 
Co­operative   Society   or   Limited   Company   or   Association,   as 
the case may be.”
Agreement to Lease dated 8th  March, 1975 from the owners, and the 
lease rent is Rs.1750/­ per month to be payable to the owners is also 
mentioned in the said flat purchasers' agreement.  The obligation of the 
Respondent No. 1 to see to it that the lease is granted to the Society of 
the flat purchasers is also part of the said flat purchasers agreement.  It 
is   on   account   of   the   default   committed   by   the   Respondent   No.   1   to 
convey its rights that the  cause for filing the application for deemed 
conveyance arose.
26)
Insofar   as   the   aforesaid   issue   is   concerned,   certain 
antecedent facts, which have already been mentioned in the earlier part 
of this Judgment are required to be revisited.  The fact that the owners 
Page 38 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
had obtained IOD and commencement certificate from the MCGM on 7 th 
March,   1975,   which   commencement   certificate   was   revalidated   from 
time to time upto the year 1979.   To facilitate the construction of the 
building,   the   owners   had   constituted   the   partnership   firm   i.e.   the 
Respondent No. 1, of which one of the partners was a member of the 
owners   family.     It   is   also   pertinent   to   note   that   the   flat   purchasers 
agreements   have   been   signed   by   the   other   family   members   i.e.   the 
ig
Respondent   Nos.   3,  6   and   7  either   singly   or  jointly   representing  the 
Respondent No. 1 M/s. Malkani Enterprises i.e. the Developer.  The fact 
that   the   owners  and   the   Respondent   No.   1   were   represented   by   the 
same   Advocate   in   the   deemed   conveyance   proceedings   and   that   a 
separate   Advocate   started   to   appear   for   the   Respondent   No.   1   just 
before   the   notice   of   termination   of   lease   was  issued   are   facts   which 
cannot be lost sight of.   The aforesaid facts therefore disclose that the 
Respondent Nos. 1 to 11 have common interest and it is pursuant to the 
said common interest that the common design appears to be to frustrate 
the   proceedings   for   the   grant   of   deemed   conveyance,   which   are 
initiated by the Society.  As regards the filing of the T. E. & R. Suit No. 
4/4 of 2013 is concerned, this Court has already recorded findings as 
regards the collusive nature of the Suit.  No doubt, the Society would be 
entitled to the right, title and interest, which the Developer/Promoter 
has.     In   the   instant   case,   the   Respondent   No.   1   is   undisputedly   the 
Page 39 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
Developer,   though   the   owners   sought   to   question   the   fact   that   the 
Respondent No. 1 is a family firm, but could not do so with any deal of 
conviction.     In   the   light   of   the   clinching   documentary   evidence   on 
record, there is no escape for the owners from the acceptance of the fact 
that it is the Respondent No. 1 who is the Developer.  The Respondent 
No.   1,   as   the   record   discloses,   has   an   Agreement   to   Lease   dated   8 th 
March, 1975 in its favour.  The Society, in terms of the provisions of the 
ig
MOFA, would therefore be entitled to the assignment of the lease, to 
which the Respondent No. 1 would be entitled to from the owners.  In 
my view, in the teeth of the clause in the agreement, which has been 
extracted hereinabove, the submissions urged on behalf of the owners 
and the Respondent No. 1 that the Society would only be entitled to 
monthly tenancy and that the order passed by the Competent Authority 
is vague in respect of the claim of deemed conveyance would have to be 
rejected.
27)
In   the   said   context,   it   would   be   gainful   to   refer   to   the 
Judgment   of   a   learned   Single   Judge   of   this   court   in   the   matter   of 
Ramniklal   Tulsidas  Kotak  and  Ors. vs.  M/s.  Varsha  Builders and  Ors.2. 
Para 16 and 17 of the said Judgment are relevant and are reproduced 
hereinunder:
2 AIR 1992 Bombay 62
Page 40 of 45
J.V.Salunke,PA
::: Downloaded on - 14/12/2014 19:43:41 :::
    
WP.9116.10356.Judgment.doc
   (1)
“16. It emerges from the scheme of the said Act read with the 
definition of the expression “Promoter” contained in S. 2(c) of 
the   said   Act   and   Rule   5   of   the   statutory   form   referred   to 
hereinabove   that   the   Promoter   must   fall   in   either   of   the 
following categories:­
The promoter may be the owner of freehold land;  
or
   (2)
The   Promoter   may   be   the   lessee   of   the   land 
intended to be developed, provided the indenture of lease 
authorities the promoter to construct flats and sell the same 
on ownership basis;
ig
   (3)
The promoter may have entered into an agreement 
to purchase the land from the lawful owner thereof.  In such 
a case, the Vendor of the promoter must have a valid title to 
the said land and the agreement must not be terminable by 
the Vendor.
   (4)
The Promoter is an agent of the owner or of the 
authorised lessee duly entitled to construct and dispose of 
flats   on   ownership   basis.     In   such   a   case,   the 
promoter/developer   must   make   the   owner   of   freehold   or 
leasehold interest as Confirming Party to the agreement of 
sale of flat on ownership basis so as to bind the owner with 
all   the   terms,   conditions   and   covenants   of   third   party 
agreement.   When the Promoter falls in 3rd  or 4th  category, 
the promoter has no title to the land in the sense in which 
the word “title” is normally under stood in the property law. 
To   this   limited   extent   the   expression   “promoter's   title”   is 
used in the Maharashtra Ownership Flats Act 1963 in the 
special wider sense.
 17. It is clear from the scheme of the Act that the promoter 
need   not  necessarily   be  the absolute   owner of  the  land  or  a 
long­term lessee thereof.  At the same time, it is imperative that 
the   promoter   must   have   sufficient   entitlement   and   right   to 
construct   on   the   land   and   dispose   of   the   flats   on   ownership 
basis so as to bind the owner of the freehold and the leasehold 
interest.  If the promoter is not the owner of the land or is not 
the duly authorised lessee of the property but is developing the 
same as a mere developer under an agreement, the owner or 
the authorised lessee must necessarily be made a Confirming 
Party to the transaction in respect of agreement to sell the flat 
with   each   of   the   flat   buyers   so   as  to   bind   the  owner  or  the 
lessee with the transaction and not to leave the flat buyer in a 

lurch later on.  If the promoter is developing the land as agent 
of   the   owner,   such   agency   must   be   irrevocable.     The   above 
construction follows by necessary implication and is supported 
by   the   scheme   of   the   Act   and   its   objects   to   protect   the   flat 
purchasers and check the malpractices.”
The learned Single Judge in the Judgment (supra), having regard 
to the scheme and the object of the Act, which is to protect the flat 
purchasers   and   check   the   malpractices,   has   interpreted   the   term 
“Promoter” as appearing in the Act.   The said Judgment can also be a 
guiding light insofar as the instant case is concerned, especially having 

regard to the fact that in the instant case the  owners as well as the 
Developer i.e. the Respondent No. 1 seem to be interested in seeing to it 
that conveyance is not granted to the Society.
There is one more dimension to the matter.   As indicated 
28)
above, it is the owners, who had obtained the IOD and commencement 
certificate   from   the   MCGM   and   it   is   through   the   medium   of   the 
Respondent   No.   1   that   they   have   commenced   and   completed   the 
construction.   Therefore, in terms of Section 2(c) of the MOFA, which 
takes within its sweep the person who has caused the construction to be 
the Promoter, the owners can be said to be the Promoters, as they have 
admittedly caused the construction.   It is therefore their obligation to 
see to it that the Society is conveyed what it is entitled to in terms of the 
agreement entered into with the flat purchasers by the Respondent No. 
1, which, in the instant case is the right to get a lease in its favour.  In 

my view, since the owners having abdicated their obligation under the 
MOFA   of   conveying   the   property   to   the   Society,   the   Competent 
Authority has rightly intervened in the matter by passing the impugned 
order.     In   my   view,   the   impugned   order   granting   the   deemed 
conveyance has therefore to be construed in the context of the rights 
the Developer had i.e. the right to get a lease from the owners.  Hence, 
the   impugned   order   cannot   be   faulted   with   on   the   ground   that   the 
29)

operative part of the order is vague or ambiguous.
The submission urged on behalf of the owners that though 
the Respondent No. 2 had expired, his heirs were not brought on record 
and since the proceedings were continued against a dead person, the 
order   is   a   nullity,   the   said   submission   can   be   said   to   epitomize   the 
manner in which the owners want to stall the grant of conveyance of 
the property to the Society.  As indicated above, the Respondent No. 1 is 
admittedly the Developer and the Respondent Nos. 3 to 11 are the heirs 
of   the   original   owner   Khatijabai,   the   Respondent   No.   1   is   a   firm 
belonging to the family.  The Respondent No. 2 was a partner of the said 
firm, assuming that the heirs of the Respondent No.2 are not brought on 
record, in my view, it would not impact the proceedings and the order 
passed by the Competent Authority, as the firm as well as the owners 
were all before the Competent Authority and have participated in the 
proceedings.  The said submission can be said to be the final gambit of 

the owners.  In my view, the said submission cannot be entertained and 
For the reasons aforestated, the impugned order insofar as 
30)
has to be rejected.
it makes the grant of deemed conveyance subject to the final decision of 
the Suit being T. E. & R. Suit No. 4/4 of 2013 would have to be quashed 
and   set   aside   and   is   accordingly   quashed   and   set   aside   to   the   said 
extent.  The Petitioner in Writ Petition No. 9116 of 2013 i.e. the Society 

would   therefore   be   entitled   to   deemed   conveyance   without   any 
conditions.   Resultantly, Writ Petition  No. 9116 of 2013 would stand 
allowed, Rule is accordingly made absolute in the said Petition in the 
aforesaid   terms.     Insofar   as   Writ   Petition   No.   10356   of   2013   is 
concerned, the same would stand dismissed.   Rule would accordingly 
stand   discharged   in   the   said   Petition.     The   parties   to   bear   their 
respective costs of the Petitions.
31)
(R. M. SAVANT, J.)
At   this   stage,   the   learned   Counsel   appearing   for   the 
Petitioners in Writ Petition No. 10356 of 2013 i.e. the owners prays for 
continuation   of   the   order   dated   13th  January,   2014,   which   was   in 
operation  pending  consideration   of   the  above  Petitions.   By  the  said 
order, it was directed that the order passed by the Competent Authority 

dated 6th  May, 2013 was not to be acted upon.   The learned Counsel 
appearing for the Petitioner in Writ Petition No. 9116 of 2013 opposes 
the application.   In the facts and circumstances of the case, the said 
order dated 13th  January, 2014 is continued for a period of six weeks 
from date.
(R. M. SAVANT, J.)

23rd September, 2014                     


Print Page

No comments:

Post a Comment