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.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9116 OF 2013
Farhat Coop Housing Society Ltd
versus
M/s. Malkani Enterprises
CORAM : R. M. SAVANT, J.
Pronounced on : SEPTEMBER 23, 2014
Citation;2016(3) ALLMR210
Rule, in both the Petitions, with the consent of the learned
Counsel appearing for the parties, made returnable forthwith and
heard.
2) 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
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
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.
4) The factual matrix involved in both the Petitions is common
and can be stated thus:
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 8th May, 1953 to one Haji Esmail Aziz
Dathawala, whose estate came to be popularly known as the Dathawala
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
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
be said to have acquired title to the land in question, in respect of
which, deemed conveyance has been granted.
6) It appears that the said Khatijabai and the Respondent Nos.
3 to 11 being the owners, applied for commencement certificate on 26th
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
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 20th February, 1975.
The MCGM thereafter issued the IOD on 21st 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
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
owners i.e. Khatijabai and others and Ibrahim Essa and another
(partners of M/s. Malkani Enterprises), came to be executed on 8th
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.
7) In the standard agreement for sale, which was printed, the
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
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 23rd 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
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
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
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
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
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
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 24rd 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
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
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 2nd 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
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
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
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
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
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.
The application for deemed conveyance was heard on 4th 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 6th May,
2013, by which order, as indicated above, the application for deemed
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
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
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.
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. R.M. KADAM FOR THE PETITIONER IN WP/9116/2013:
16) (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.
(ii) That the Competent Authority failed to appreciate
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.
(v) 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
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
respect of the various flat purchasers complete and therefore, the
Competent Authority has erred in entertaining the said application.
(iii) In terms of the Section 11(1) of the MOFA, the
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
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.
(iv) That the impugned order discloses that the
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
No. 1 namely the monthly tenancy and could not have been given the
deemed conveyance of the assignment of the lease.
(vi) That though the Respondent No. 2 had expired,
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
and therefore a nullity.
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. A.Y.SAKHARE FOR THE RESPONDENT NO. 1 IN WP/9116/13:
18) (i) 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
deemed conveyance, as in the operative part, the Competent Authority
has mentioned alternatives.
CONSIDERATION:
19) 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
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 cooperative
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
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.”
20) In the context of the challenge raised in the above Petitions,
it would be apposite to reproduce Sections 5A, 10 and 11 of the MOFA,
which read thus:
“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 cooperative
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
first verifying authenticity of the applicants request and
giving the concerned promoter a reasonable opportunity of
being heard.
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
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.
(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.
21) 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,
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
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
8
th 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
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.
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 nonappearance
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
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
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.
(6) Signing of order and the notice and the official
seal.
(a) Every Judgment, order and the certificate of
the Competent Authority shall be delivered or supplied or
provided to all the concerned parties.
(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.”
22) 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
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
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;
2. Copy of Resolution;
3. Copy of Agreement for sale/purchase.
4. 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. 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
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
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:
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
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
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
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,
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
unsustainable and is required to be quashed and set aside.
24) The next issue is as to what rights of the Promoter/
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
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:
“AND WHEREAS the Flatholder has taken inspection from the
Builders of the aforesaid Agreement for Lease dated 8th 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 carparking
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 Flatholder
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
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 Cooperative
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.”
25) Hence, the Respondent No. 1, who is the Developer has an
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
had obtained IOD and commencement certificate from the MCGM on 7th
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
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
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 8th
March, 1975 in its favour. The Society, in terms of the provisions of the
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
“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:
(1) 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;
(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.
28) There is one more dimension to the matter. 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.
29) 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
has to be rejected.
30) For the reasons aforestated, the impugned order insofar as
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.
(R. M. SAVANT, J.)
31) 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.
23rd September, 2014 (R. M. SAVANT, J.)
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