Developers can’t defer conveyance by invoking contracts, procedures: HC

MUMBAI: The Bombay high court held that developers cannot indefinitely defer their statutory obligations by invoking contractual or procedural contingencies and directed the district deputy registrar (DDR), co-operative societies, Mumbai city (4), to grant conveyance certificate to a Kandivali-based cooperative housing society which had been awaiting the certificate for the past ten years.

The single judge bench of justice Amit Borkar said that the developer’s objection that the petitioner-society – Veer Tower Co-operative Housing Society in Kandivali West – must await the completion of redevelopment and the formation of a federation of all the six housing societies in the layout was devoid of legal merit.

“The statutory scheme of MOFA (Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management, and Transfer) Act, 1963, particularly section 11, is designed to confer an immediate and enforceable right to conveyance upon societies, irrespective of peripheral contractual or developmental contingencies,” said justice Borkar while directing the registrar to issue unilateral deemed conveyance to the housing society in terms of the architects’ certificate submitted by it.

The order was passed on Tuesday on a petition filed by Veer Tower CHS, challenging DDR’s May 9, 2022 order, wherein it rejected the society’s proposal under section 11 of MOFA for unilateral deemed conveyance. The housing society had sought conveyance of the built-up area aggregating to 9,140.83 square metres of the total built-up area of 17,676.95 square metres.

The plea was opposed by the developer, Shree Sainath Constructions, contending that the agreement of sale entered into with members of the petitioner-society unequivocally stipulated that the conveyance of the disputed land was to be effected in favour of a federation comprising Veer Tower, five Dev Nagar housing societies and societies to be subsequently formed, and the petitioner-society had agreed for amalgamation of adjoining plots and execution of the redevelopment project for Dev Nagar buildings undertaken by M/s Bhadra Enterprises and M/s Vandana Properties.

The developer maintained that since formation of a federation and completion of redevelopment were preconditions for conveyance, unilateral deemed conveyance was rightly denied to Veer Tower CHS. The three developers also raked up several other issues like the authenticity of the architect’s certificate and the society’s authority to seek separate conveyance.

Justice Borkar, however, found the objections legally untenable, especially as ten years had already passed after flats were handed over to buyers in Veer Tower and plans for further redevelopment on remaining land were not even sanctioned by the planning authority.

“The assertion that the federation’s right to seek conveyance is contingent upon the completion of redevelopment is legally unsustainable,” said the court while rejecting the builder’s objection. “The MOFA Act does not contemplate relegating a society’s statutory rights to the vagaries of an uncertain and un-commenced redevelopment process.”

Justice Borkar clarified that the statutory framework prioritises the protection of purchasers’ rights over speculative contractual stipulations – put forth by builders and developers. “Indefinite delays in redevelopment cannot override the statutory mandate of section 11. The petitioner’s right to conveyance, having matured upon the execution of the agreement and payment of consideration, cannot be subordinated to the respondents’ unsubstantiated assurances of future compliance,” said the court.

Observing that the inordinate delay of ten years in granting unilateral deemed conveyance to the housing society constituted an unreasonable deprivation of its statutory and equitable entitlements, the court directed the DDR to grant conveyance certificate to the housing society in terms of its architect’s certificate within four weeks from March 3 – when the parties are ordered to appear before the DDR.