Quantum Park Cooperative Housing Society Limited v. AHCL-PEL & Ors.

15. The Competent Authority rejected the application on the ground that the area sought to be conveyed, namely 4242.90 square meters, exceeded the area allegedly admissible to the society, stated to be 3635.10 square meters. The impugned order further records that the petitioner may file a fresh application after disposal of Suit No. 419 of 2018 instituted by the society and Suit No.1037 of 2018 instituted by certain members. The subject matter of the said suits concerns the alleged illegality of the 13th and 14th floors of the building. The pendency of those suits, which relate to the legality of certain floors, does not operate as a legal bar to consideration of an application for deemed conveyance. The issues involved in the said suits are distinct and have no direct bearing on the petitioner’s statutory entitlement under Section 11 of the Act.

16. Mr. Bhole, learned counsel for the petitioner contends that respondent No.10 failed to take into consideration the fact that an additional area of 656.[2] square meters was subsequently included in the larger property. This inclusion, according to him, is borne out by the communication dated 13 February 2004 issued by the District Officer, Mumbai Suburban District bearing No. C Office 2K CTS Vashi 949 of 2003, addressed to the Chief Executive Officer of the Slum Rehabilitation Authority, whereby a No Objection Certificate was granted for incorporation of the said additional area. It is further submitted that respondent No. 10 did not appreciate that the buildings of the petitioner society form part of the Free Sale Component bearing CTS No. D 1084 B 2 admeasuring 4242.90 square meters. The said Free Sale Component was thereafter subdivided into four parts, namely CTS No. D 1084 B 2 A admeasuring approximately 3635.[4] square meters, CTS No. D 1084 B 2 B admeasuring approximately 228.[5] square meters, CTS No. D 1084 B 2 C admeasuring approximately 353.[5] square meters and CTS No. D 1084 B 2 D admeasuring approximately 25 square meters. Learned counsel submits that respondent No. 10 erred in law in overlooking the settled legal position that an order directing execution of deemed conveyance does not finally determine or adjudicate the right, title and interest of the parties. Any person aggrieved by such conveyance retains the liberty to institute appropriate proceedings before the competent Civil Court.

17. It is further contended that the limited scope of enquiry before respondent No. 10 was confined to determining the area liable to be conveyed to the petitioner society. Instead, respondent No. 10 exceeded the bounds of jurisdiction by taking into consideration disputes of a civil nature pending between the parties, which were extraneous to the proceedings under Section 11 of the Act. Learned counsel also submits that respondent No. 10 failed to consider the Agreement for Sale dated 5 September 2017 annexed as Exhibit C to the application. The said agreement, executed between respondent No. 1 and a flat purchaser, records in recital S that Wing A and Wing B of the petitioner society have been constructed on the property described as IRDLY in the First Schedule thereto. The description of IRDLY in the First Schedule corresponds to the property admeasuring 4242.[9] square meters, being the very land on which the petitioner society’s buildings stand. It is further submitted that even assuming a dispute regarding the larger extent of land, respondent No. 10 ought to have granted deemed conveyance at least in respect of the lesser area of 3635.90 square meters instead of rejecting the application in its entirety.

18. On the aforesaid premises, it is urged that this Court may direct respondent No. 10, the District Deputy Registrar, Co operative Societies, Mumbai, to issue a certificate under Section 11 of the Maharashtra Ownership Flats Act in respect of unilateral deemed conveyance of land bearing CTS No. D 1084 B 2 A admeasuring 3635.[4] square meters situated at Bandra Danda, Khar West, Mumbai 400052, together with the two multistoried buildings known as Quantum Park Wing A and Wing B comprising basement, stilts and fourteen upper floors.

19. Mr. Deokar learned counsel for respondent No. 2 submits that the erstwhile respondent No. 2, now Innovative Construction Private Limited, initially constructed two wings of the building known as Quantum Park, namely Wing A and Wing B, each consisting of twelve floors, in accordance with plans approved by the Slum Rehabilitation Authority. An Occupation Certificate in respect thereof was issued by the Slum Rehabilitation Authority on 10 April 2003. It is further submitted that plans were subsequently approved for construction of the thirteenth floor in both Wing A and Wing B. Construction of the said thirteenth floors was carried out by the erstwhile respondent No. 2, and an Occupation Certificate dated 18 July 2006 was issued. As per the Occupation Certificate plans of the said date, the FSI approved for the thirteenth floor in Wing A was 279.23 square meters and in Wing B was 197.03 square meters. Learned counsel submits that the fourteenth floor in Wing B has not been constructed to date. The FSI of 147.33 square meters, which according to respondent No. 2 pertains to the proposed fourteenth floor of Wing B, has been unlawfully diverted by respondent Nos. 1, 3 and 4 to flats constructed on the thirteenth and fourteenth floors of Wing A pursuant to a Commencement Certificate dated 12 January 2016. The alleged deviations are set out as follows:

(i) The flats on the thirteenth floor of Wing A presently comprise FSI of 337.87 square meters. Of this, only 279.23 square meters is stated to belong to respondent Nos. 1, 3 and 4 as per the sanctioned plans dated 31 July 2010 and the Occupation Certificate plans dated 17 January 2012. The balance FSI of 58.64 square meters is alleged to have been unauthorisedly transferred from the FSI of 147.33 square meters claimed by respondent No. 2 for Wing B.

(ii) The flats on the fourteenth floor of Wing A presently comprise FSI of 296.49 square meters. Out of this, only

209.94 square meters is stated to be sanctioned in favour of respondent Nos. 1, 3 and 4 as per the approved plans dated 31 July 2010 and the Occupation Certificate plans dated 17 January 2012. The excess FSI of 86.55 square meters is alleged to have been diverted from the FSI claimed by respondent No. 2.

(iii) It is thus contended that the total FSI of 147.33 square meters claimed by respondent No. 2 for construction of the fourteenth floor in Wing B has been appropriated by respondent Nos. 1, 3 and 4 by utilising 58.64 square meters for additional construction on the thirteenth floor of Wing A and 86.55 square meters for additional construction on the fourteenth floor of Wing A.

(iv) Even the Occupation Certificate plans dated 25 April

2016, according to respondent No. 2, reflect that no construction has been carried out on the fourteenth floor of Wing B.

20. In view of the aforesaid, respondent No.2 has instituted Commercial Suit No.178 of 2021 before this Court seeking, inter alia, a declaration that the construction of the additional 58.64 square meters on the thirteenth floor of Wing A and 86.55 square meters on the fourteenth floor of Wing A is illegal, invalid, and contrary to the sanctioned plan dated 31 July 2010 as well as the Occupation Certificate plan dated 17 January 2012, together with consequential reliefs against respondent Nos.1, 3, and 4. It is therefore submitted that in view of the pendency of the said suit filed by respondent No.2 and the observations made by this Court while admitting flat purchasers of the thirteenth and fourteenth floors of Wing A, any conveyance executed in favour of the petitioner society ought to be made expressly subject to the final outcome of the suit filed by respondent No. 2 as well as the suit instituted by the petitioner society.

REASONS AND ANALYSIS:

21. I deal with the rival contentions, review the material on record, and explain why the order of respondent No.10 dated 22 April 2022 cannot stand.

22. Respondent No.10’s stated reason for rejection was twofold. First, the Authority recorded that the society sought conveyance of 4,242.90 square meters, a figure the Authority considered larger than the society’s entitlement. Second, the Authority directed that the society may file a fresh application after the pending civil suits are decided. Both reasons are legally flawed.

23. On the first ground given by the Authority, the reasoning does not stand scrutiny. The Competent Authority had before it clear and specific documentary material. When such material is available on record, the Authority is expected to read it carefully, reconcile it, and then arrive at a reasoned conclusion about the exact area that is liable to be conveyed. The record includes the order passed by the Slum Rehabilitation Authority permitting amalgamation and thereafter subdivision of the larger property. That order changes the manner in which the property stands recorded in official records. It is followed by corresponding changes in the city survey records and the property register cards. The MR plan reflects the actual measurement on the ground and records the additional area found during survey. These are official acts carried out by competent authorities in exercise of statutory powers. They form the foundation of title identification.

24. Once subdivision is approved and recorded, the original larger CTS number ceases to remain a single indivisible parcel. It breaks into distinct and separately identifiable parts. In the present case, the Free Sale Component bearing CTS No.D/1084/B/2 was further subdivided, and one such sub part is CTS No.D/1084/B/ 2/A admeasuring about 3,635.[4] square meters. The measurement is not an approximation drawn by the society. It flows from survey records and subdivision particulars maintained in official registers. The Authority also had before it the Agreement for Sale and registered sale deeds. Those documents are executed by the developer itself. They describe the property in the First Schedule as IRDLY. That description corresponds to the land on which the buildings known as Wings A and B are constructed. The registered documents tie the constructed buildings to a specific survey identity. They are instruments registered under the Registration Act. When the developer has represented to flat purchasers that their building stands on a defined property, and possession has been delivered accordingly, the Authority cannot ignore that representation while deciding a statutory application under

25. At the very least, the Authority was required to examine whether the buildings of the society stand on CTS No.D/1084/B/ 2/A. If the answer from the record is in the affirmative, then the society’s entitlement to that sub parcel follows, subject of course to other legal objections. Instead, the Authority appears to have rejected the entire application on the footing that the society sought conveyance of 4,242.90 square meters being the larger CTS No. D/1084/B/2. That approach shows non application of mind. When subdivision particulars are on record, the Authority must separate the parcels and determine which parcel corresponds to the society’s construction. It cannot treat the entire parent number as a single block and reject the claim without analyzing its components.

26. It is true that the Authority may scrutinise the area claimed. It may correct clerical errors. It may even reduce the area if the record supports a smaller entitlement. But what it cannot do is avoid the exercise altogether. If the society claimed a larger area than what the record justified, the Authority was duty bound to identify the correct lesser area and grant conveyance accordingly. The statute does not contemplate an all or nothing approach. It requires the Authority to determine the area “to be conveyed”. That necessarily involves quantification on the basis of existing survey and subdivision records. By declining to isolate CTS No. D/1084/B/2/A and by failing to test the claim against the MR plan, the SRA order and the registered sale documents, the Authority abdicated its statutory responsibility. The material on record was sufficient to at least prima facie establish that the buildings stand on the subdivided parcel measuring about 3,635.[4] square meters. Once that position emerged from official records and contractual documents, the Authority ought to have proceeded to grant conveyance in respect of that identified sub parcel. In effect, the Authority treated the existence of subdivision as irrelevant and rejected the application on a broad assertion regarding total area. That reasoning cannot be sustained. The exercise required was a careful identification of the correct CTS sub number and its corresponding area. Had that exercise been undertaken, the Authority would have found that the documentary record supported conveyance of the admitted sub parcel. The failure to do so vitiates the impugned order.

27. The second reason assigned by the Authority is equally unsustainable. The mere pendency of civil suits cannot operate as a blanket prohibition against exercise of statutory power under Section 11 of MOFA. If that principle were accepted, any promoter or contesting party could stall a deemed conveyance simply by filing a suit and keeping it pending. The statute does not contemplate such approach. It is necessary to see what the pending suits actually concern. Suit No. 419 of 2018 and Suit No. 1037 of 2018, as well as Commercial Suit No. 178 of 2021, revolve around allegations of irregular construction and improper utilisation of FSI. The grievance of respondent No.2, in particular, is that certain portions of FSI were diverted from one wing to another and that additional construction on the 13th and 14th floors of Wing A was carried out contrary to sanctioned plans. These issues relate to building permissions, sanctioned layouts, occupation certificates and compliance with planning regulations.

28. Such questions require detailed examination of sanctioned plans, commencement certificates, occupation certificates and municipal records. They fall squarely within the domain of civil adjudication. However, they do not, by themselves, alter the identity of the land parcel on which the buildings stand. They do not dispute that the buildings exist. They do not dispute that flats were sold. They do not dispute that possession was handed over and that the society was formed. The controversy is about how much FSI was lawfully utilized and whether additional floors were constructed in accordance with law. There is a clear distinction between a dispute about the identity or ownership of the land and a dispute about the manner in which construction was carried out on that land. The documents on record, including the SRA order, the survey plan and the subdivision particulars, consistently show that the buildings stand on CTS No.D/1084/B/2/A. The registered agreements for sale also describe the property accordingly. The pending suits do not seek a declaration that the land belongs to someone else or that the society has no connection with the said sub parcel. They focus on alleged excess construction and unauthorized FSI adjustments between wings.

29. An order of deemed conveyance under Section 11 does not validate unauthorized construction. It does not certify that every floor has been lawfully built. It merely transfers the promoter’s right, title and interest in the land and building to the society, subject to existing rights and liabilities. If a civil court ultimately holds that certain floors are illegal or that certain FSI has been misused, appropriate directions can still be issued. The grant of conveyance does not obstruct that process. By treating the pendency of suits as a complete bar, the Authority effectively expanded its jurisdiction beyond the statute. Section 11 requires the Authority to decide whether the society is entitled to conveyance of the land and building. It does not authorise the Authority to sit in judgment over complex construction disputes already pending before civil courts, nor does it permit indefinite postponement on that ground alone. The reasoning in the impugned order suggests that until all disputes between the parties are finally resolved, no conveyance can be granted. Such an approach defeats the very object of MOFA. The Act was enacted to ensure that flat purchasers are not left at the mercy of promoters and that conveyance of the property is not indefinitely delayed. If pendency of any suit is treated as a sufficient reason to deny conveyance, the statutory protection becomes illusory. In the present case, the disputes pending before the civil court do not strike at the root of the society’s entitlement to the identified sub parcel. They relate to alleged deviations in construction and allocation of FSI. Those issues can be examined and decided independently. The Authority was therefore in error in assuming that it lacked power to proceed under Section 11 merely because such suits are pending. The law does not impose such a restraint. The Authority misdirected itself in treating pendency of civil litigation as a categorical bar to issuance of a certificate of deemed conveyance.

30. I consider the specific submissions of respondent No.2 about FSI. Respondent No.2 says FSI of 147.33 square meters belonging to it for the proposed 14th floor of Wing B was diverted to construct additional area in Wing A. Respondent No.2 relies on occupation certificate plans and alleges usurpation of FSI. Those are serious factual contentions. They justify adjudication in a civil forum. They do not, however, automatically extinguish the society’s right to apply for deemed conveyance for the land parcel on which buildings stand. The remedy for alleged FSI usurpation lies in the civil suit which respondent No.2 has filed. That civil suit will determine whether additional construction was lawful and whether any corrective orders or adjustments are necessary. It will not, however, convert the statutory duty of the Competent Authority into a fact-finding mission on all civil disputes touching constructional deviations. The Authority must confine itself to the statutory criteria for Section 11. It must grant a certificate where the society establishes its entitlement to the parcel on record and possession, subject to civil rights being preserved.

31. The Agreement for Sale dated 5 September 2017 and recital S merit attention. That document records that Wings A and B were constructed on the property described as IRDLY in the First Schedule. The First Schedule’s description corresponds to D/1084/B/2/A. The Agreement is a contemporaneous commercial document executed between the developer and a purchaser. It supports the society’s claim that the wings occupy the subparcel D/1084/B/2/A. It also shows that purchasers understood the property they bought and took possession accordingly. The Authority should have placed appropriate weight on that agreement along with survey records and SRA orders.

32. The Competent Authority must act in accordance with the statute and the record. The facts here show that the society has established, prima facie, its entitlement to CTS No. D/1084/B/2/A admeasuring 3,635.[4] square meters. The pending civil suits do not negate that entitlement on the present record. The Authority’s refusal to grant any relief, instead asking for a fresh application after litigation, was unreasonable and legally unsustainable.

33. Hence, following order is passed:

(i) The writ petition is allowed.

(ii) The Judgment and Order dated 22 April 2022 passed by respondent No. 10 in Application No. 127 of 2021 under Section 11 of the Maharashtra Ownership Flats Act, 1963 is quashed and set aside.

(iii) It is declared that the petitioner society is entitled to unilateral deemed conveyance in respect of land bearing CTS No. D/1084/B/2/A admeasuring approximately 3,635.[4] square meters situated at Bandra Danda, Khar West, Mumbai 400 052, together with the buildings known as “Quantum Park” Wing A and Wing B standing thereon.

(iv) Respondent No.10, being the Competent Authority under Section 11 of the Maharashtra Ownership Flats Act, 1963, shall issue the certificate of unilateral deemed conveyance in favour of the petitioner society in respect of the aforesaid property within a period of four weeks from the date of receipt of a copy of this order.

(v) All rights and contentions of the parties in pending suits, including Suit No. 419 of 2018, Suit No. 1037 of 2018 and Commercial Suit No. 178 of 2021, are kept open.

34. Rule is made absolute in the above terms. No order as to costs. (AMIT BORKAR, J.)