Bombay High Court Upholds Deemed Conveyance, Emphasizes Law Over Private Contracts
In a significant ruling, the Bombay High Court on Wednesday upheld a deemed conveyance granted to a commercial cooperative society in Andheri East, Mumbai. The court firmly stated that laws enacted in the public interest cannot be superseded by contractual agreements between builders and flat purchasers, particularly those that reserve development rights for the builder.
Case Background and Builder's Challenge
Krishna Developers contested the deemed conveyance awarded to the Corporate Centre Premises Co-operative Society Ltd., which was registered in 2007 and represents unit purchasers across three buildings. The builder's legal counsel argued that they were prepared to execute the conveyance, but only under the condition of preserving rights explicitly outlined in their agreements with the flat purchasers.
However, the High Court dismissed this argument, asserting that "parties cannot by agreement override a legislative command." This decision addresses a common issue in Mumbai, where disputes over the lack of conveyance documents frequently arise, often leading to legal battles as builders strive to retain development rights over land.
Court's Detailed Observations and Reasoning
Justice Amit Borkar, presiding over a single-judge bench, noted in the order that Krishna Developers' 2024 petition essentially expressed dissatisfaction with the conveyance being "unfavourable to him." The court clarified that "disagreement with the result does not amount to jurisdictional error."
After hearing arguments from advocate Deepak Chitnis for the builder, additional government pleader Aloka Nadkarni, and the society's counsel Arun Panickar, the court highlighted that the conveyance was granted following the issuance of Occupancy Certificates and the full utilization of permissible Floor Space Index as per the sanctioned plan.
Panickar pointed out that despite the builder's professed willingness, no concrete steps were taken to complete the conveyance within the statutory timeframe, necessitating the deemed conveyance proceedings.
Statutory Obligations Under MOFA
The High Court emphasized that Section 11 of the Maharashtra Ownership Flats Act imposes a specific duty on authorities to intervene when promoters fail to execute conveyance within the prescribed period. "The authority is enforcing a statutory obligation created in public interest," the court stressed.
Furthermore, the court observed that no surviving development rights remained with the promoter after the completion of the three buildings. "Once the available FSI stood consumed and occupation certificates were issued, the promoter's statutory duty to convey became absolute, subject only to what is lawfully recorded in the sanctioned plan," the order stated. It added, "The promoter cannot rely upon private contractual language to defeat a public law obligation imposed by MOFA."
Limits on Judicial Interference and Society Management Issues
The High Court clarified that its interference is justified only in cases of patent lack of jurisdiction, violation of natural justice, or manifest error of law, none of which were present in this instance.
Addressing objections raised by the builder regarding the society's management, the court noted that the authority responsible for considering conveyance does not adjudicate complex title questions. "In that background, objections relating to internal management of the society must be viewed with caution," the court said.
It explained that societies operate through elected office bearers, and disputes over eligibility, elections, or resolutions are governed by the Co-operative Societies Act, to be resolved in appropriate forums. "Such disputes do not automatically render every action taken by the society void," the High Court concluded.
