Deemed conveyance can’t be denied on grounds of faulty agreement: HC

MUMBAI: In an important ruling, the Bombay high court on Thursday held that the competent authority cannot reject applications for deemed conveyance on the grounds of legality and validity of agreements executed between the parties, and directed the joint registrar, Co-Operative Societies to issue certificate of deemed conveyance to a housing society of Kamothe in Navi Mumbai.
The concept of deemed conveyance was introduced by the Maharashtra government in 2008 and the rules published in 2010, whereby a society that did not receive the conveyance deed (the legal document that transfers the ownership of land to a cooperative society from a developer or from the landowner) was entitled to apply to the deputy district registrar of Cooperative Societies, that would then pass an order conveying the land in favour of the society after verification of documents.
Hearing a petition filed by Blue Heaven Co-op Housing Society, challenging an order dated 18 January 2023 passed by the joint registrar, Co-operative Societies (CIDCO), rejecting the plea filed by the society for deemed conveyance, a single judge bench of justice Sharmila Deshmukh held that once the competent authority finds that the promoter (developer or landowners) has not conveyed the property to the housing society, as mandated under the Maharashtra Ownership of Flats (Regulation of Promotion of Construction of sale, Management and Transfer) Act, 1963, (MOFA) the authority must fulfil the legal mandate and issue deemed conveyance.
“It is not open for the Competent Authority in the limited jurisdiction to delve into the validity of the documents executed between the parties, including the issue of title and to reject the application of deemed conveyance on the grounds of validity of the documents,” the bench said.
The society building was constructed by M/s. Punit Construction Company on the land allotted by CIDCO to two individuals – Ambo Gadge and Shripat Patil. The building construction was completed in February 2006, when the occupancy certificate for the building was issued. However, the developer and the landowners neither got the housing society registered nor executed conveyance in its favour, prompting the society to apply for deemed conveyance.
The joint registrar had accepted the objections raised by the landowners regarding rights of the developer to construct the building and rejected the society’s plea on January 18, 2023, primarily on the grounds that the agreement executed between the landowners and the developer was unregistered and there was privity of contract between the landowners and the flat purchasers. The competent authority also considered the fact that the building was not in existence – as it was demolished for being dilapidated.
The high court, however, found the order of the joint registrar unsustainable. “The rejection of the application by arriving at the above findings, in my view, goes way beyond the jurisdiction of Competent Authority,” said justice Deshmukh. “The dispute between the owner and developer cannot be permitted to jeopardise the rights of flat purchasers to obtain conveyance,” he said.
As regards the grounds of lack of privity of contract between landowners and the flat purchasers, the court said all permissions such as the commencement certificate and occupancy certificate etc. were issued in name of the owners and having caused the construction, the owners were “promoters” and therefore bound to convey the property as contemplated under MOFA.