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CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5714 OF 2021
Marvel Promoters & Developers (Pune)
Private Limited, presently known as
Marvel Realtors & Developers Ltd. having office at A-10/1, Meera Nagar, Koregaon Park, Pune – 411 001 … Petitioner
Deputy Registrar, C.S. Pune City, Pune
2. Marvel Aquanas Co-op. Housing
Society Ltd., Survey No69, Hissa
Nos.4 & 5, Kharadi, Taluka Haveli, Pune, through Mr. Vishal Popat
3. Competent Officer, District Deputy
4. The State of Maharashtra, through Co-operative Department, Mantralaya, Mumbai
5. Chaitanya Komal Infracon LLP
, registered address at 801/802, Crystal Tower 49, Maruti Lane, Fort, Mumbai 400 001
6. C.N. Sanghvi & Co. (Forwards) Pvt. Ltd.
Office at 13, Vatsa House (Noble
Chambers), 2nd
Floor, Janmabhoomi
Marg, Fort, Mumbai – 411 001.
7. ISC Infrastructures Pvt. Ltd., (Now known as Ideal Prime Realtors
LLP), Office at : S-2, The Metropole, Adjacent to Inox, Bund Garden Road, Pune 411 001
… Respondents
Gharte for the petitioner.
Ms. Sulbha Chipade, AGP for respondent Nos.1, 3, & 4-
State.
Dr. Abhinav Chandrachud with Mr. Pavan Patil, Mr. Shubham Saraf, Mr. Shubhankar Kulkarni and Mr. Dewant Mhatre for respondent No.2.
Mr. Dushyant Pagare for respondent No.7.
JUDGMENT
1. Challenge in this petition filed under Article 227 of the Constitution of India is to the legality, propriety and correctness of the order dated 14th October 2020 passed by the District Deputy "the Competent Authority") in Deemed Conveyance Application No. DC/1006635/2019/3263, whereby the Competent Authority directed execution of a deemed conveyance deed in favour of respondent No.2-Society. Consequent to the said impugned order, a Sale Deed styled as Deemed Conveyance Deed came to be registered on 20th October 2020, which is also under challenge in the present proceedings.
2. The facts and circumstances giving rise to the filing of the present writ petition, as narrated by the petitioner, are briefly set out as under:
3. The dispute in the present matter pertains to the immovable property comprising land bearing Survey No. 69, Hissa Nos. 4 and 5, situate at Kharadi, Taluka Haveli, District Pune, admeasuring approximately 18,038 square meters. The said land forms the subject matter of a development project, which consists of two buildings each having 22 storeys, being developed by the petitioner.
4. It is the case of the petitioner that in respect of the said development project, various agreements to sell were entered into between the petitioner and individual purchasers, who are now members of respondent No.2-Society. These agreements were executed progressively from the year 2016 onwards. The project comprises a total of 72 flats. According to respondent No.2-Society, the petitioner had agreed to execute the conveyance of the said land along with the buildings constructed thereon in favour of the Society upon completion of construction. However, despite the completion of construction, the petitioner allegedly failed to execute the requisite conveyance. Consequently, by notice dated 30th August 2019, the respondents called upon the petitioner to forthwith execute the conveyance deed in favour of respondent No.2-Society.
5. It appears that since the requisite number of flat purchasers, as prescribed under the provisions of the Maharashtra Cooperative Societies Act, 1960, had acquired flats in the said project, the members proceeded to apply for registration of a cooperative housing society. Accordingly, respondent No.2-Society came to be registered on 7th May 2019 under the said Act. However, even after a lapse of four months from the date of registration, the petitioner failed to execute the conveyance of the subject property in favour of the Society. This led respondent No.2-Society to initiate proceedings under Section 11(3) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963(hereinafter referred to as “MOFA”) by filing an application before the Competent Authority for issuance of a deemed conveyance.
6. In response to the said application, the petitioner appeared before the Competent Authority and raised several contentions. It was submitted that out of a total of 82 flats forming part of the project (including those in other buildings), only 55 flats had been sold, and that 25 flats still remained unsold. It was further contended that part consideration from some of the purchasers was yet to be received by the petitioner. The petitioner asserted that it was always ready and willing to execute the conveyance deed in favour of respondent No.2-Society, but only upon completion of the entire project in accordance with the terms and conditions of the respective agreements executed with the purchasers.
7. The Competent Authority, in accordance with statutory requirements, caused a public notice to be published in a local newspaper for effecting service on opponent Nos.[2] to 4. However, despite such publication and service, there was no appearance on behalf of respondent Nos.[2] to 4 before the Competent Authority. Upon perusal of the documents and material placed on record, and being satisfied that a prima facie case had been made out, the Competent Authority proceeded to pass the impugned order directing issuance of a deemed conveyance in favour of respondent No.2-Society. The said deemed conveyance was directed in respect of a land admeasuring 9,925.70 square meters, together with constructed area of 14,365.81 square meters. However, the Competent Authority declined to grant any relief in respect of additional development rights such as FSI and TDR, relegating the Society to avail appropriate civil remedies in that regard. Aggrieved by the aforesaid order and the consequent registration of the deemed conveyance deed, the petitioner has approached this Court by way of the present writ petition under Article 227 of the Constitution of India.
8. Mr. Sakhare, the learned Senior Advocate appearing for the petitioner, assailed the legality and propriety of the impugned order passed by the Competent Authority. At the outset, the learned Senior Advocate submitted that the application for deemed conveyance, as filed by respondent No.2-Society, was premature and not maintainable in law, inasmuch as the same was filed within four months from the date of registration of the Society. He submitted that respondent No.2-Society cannot be termed as a "body duly constituted" within the meaning of MOFA, at the relevant time, and hence was not competent to seek deemed conveyance.
9. Learned Senior Advocate placed reliance upon Clause 33 of the agreement for sale executed between the petitioner and individual purchasers, which was entered into in terms of Section 4 of MOFA. He submitted that as per the said clause, the petitioner-promoter was under an obligation to execute the conveyance deed only upon completion of the entire project in its entirety and after realization of all outstanding dues from the purchasers of all units within the complex. He contended that the contractual stipulation regarding the stage at which conveyance was to be effected was binding on the parties and could not be disregarded by the Competent Authority.
10. It was further submitted that the petitioner was yet to comply with certain obligations towards statutory authorities. In particular, the learned Senior Advocate submitted that an area admeasuring approximately 2,849 square meters was to be surrendered to the Pune Municipal Corporation towards amenity space and such surrender had not yet been effected. Additionally, it was pointed out that the occupation certificate in respect of the project had not yet been issued, and therefore the project could not be said to be complete in the eyes of law. On these grounds, it was contended that the direction issued by the Competent Authority to execute deemed conveyance was vitiated by patent illegality and was liable to be quashed and set aside.
11. Per contra, Dr. Chandrachud, the learned Advocate appearing on behalf of respondent No.2-Society, supported the impugned order passed by the Competent Authority. Referring to the very same agreement entered into under Section 4 of MOFA, the learned Advocate submitted that the petitioner had unequivocally agreed to convey the land admeasuring 18,038 square meters in favour of the Society, and that the rights of the members of the Society flow directly from such contractual and statutory obligation of the petitioner.
12. It was his submission that the sanctioned layout plan, as disclosed to the flat purchasers at the inception, demarcated the extent and character of the property to be conveyed. The petitioner, having availed the benefit of selling flats based on such layout and disclosures, could not now be permitted to resile from his obligation under the garb of technical objections or alleged non-payment by certain purchasers. He further submitted that the Competent Authority had, in fact, limited the conveyance only to the extent of the area expressly referred to in the agreement and had not exceeded the scope of the petitioner's obligations.
13. Learned counsel pointed out that as per the agreement, possession of the units was required to be handed over to the respective purchasers on or before 30th June 2017, and accordingly, possession has been handed over. He submitted that the grievance that some purchasers have not paid the full sale consideration cannot be made a ground to delay or deny conveyance to the Society as a whole. He emphasized that the petitioner cannot act contrary to the statutory mandate under MOFA and frustrate the rights of the flat purchasers who have formed themselves into a duly registered cooperative housing society. He, therefore, submitted that the order passed by the Competent Authority is consistent with the provisions of MOFA, especially Section 11(3), and is also in conformity with the agreements executed by the petitioner himself. As such, no interference is warranted by this Court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India.
14. The rival contentions as urged on behalf of the respective parties now fall for consideration.
15. Upon careful perusal of the material placed on record, it is evident and undisputed that the petitioner had agreed to convey land admeasuring 18,038 square meters in favour of the Association of Purchasers, i.e., respondent No.2-Society. It is also an admitted position that the construction of both buildings forming part of the subject project stands completed. The principal objection raised by the petitioner is premised on Clause 33 of the agreement for sale executed under Section 4 of MOFA. It is the case of the petitioner that as per Clause 33, the conveyance was not required to be executed until such time as the entire project, including all units therein, was completed and the promoter had received full consideration from all purchasers. It is contended that since some purchasers have allegedly defaulted in making full payment, the petitioner cannot be compelled to execute conveyance in favour of respondent No.2-Society.
16. The aforesaid submission advanced on behalf of the petitioner, however, cannot be accepted in light of the clear statutory mandate embodied in Rule 9 of the Maharashtra Sale, Management and Transfer) Rules, 1964 (hereinafter referred to as "the MOFA Rules"). Rule 9 unequivocally lays down the time frame within which the promoter is required to convey title to the organization of flat purchasers. The Rule stipulates that in the event no specific period is agreed upon between the promoter and the purchasers, the promoter shall execute the conveyance deed within four months from the date of registration of the cooperative housing society or association of flat purchasers.
17. This Rule is framed in furtherance of the statutory object underlying Section 11 of MOFA, which imposes a positive obligation upon the promoter to transfer the title of the land and building in favour of the society or association of flat purchasers, and is aimed at preventing indefinite withholding of conveyance under various pretexts. The four-month period provided under Rule 9 is a codified timeline to ensure timely compliance with this statutory duty. The statutory right of the society to obtain conveyance cannot be defeated or postponed indefinitely by the promoter on grounds of alleged non-fulfilment of contractual conditions by individual flat purchasers. MOFA being a welfare legislation must be construed in a manner that furthers the objective of protecting flat purchasers and enabling them to secure their rights in immovable property.
18. What requires particular emphasis is the specific and deliberate use of the term “period” in Rule 9 of the Maharashtra Sale, Management and Transfer) Rules, 1964 (hereinafter “the MOFA Rules”). The legislative intent behind the employment of the expression “period” must be discerned in light of its plain and grammatical meaning — namely, a determinable and fixed segment or division of time, capable of being measured and ascertained. This interpretation is in consonance with the wellsettled principle of statutory construction that words used in subordinate legislation must be understood in their natural, ordinary, and popular sense, unless the context otherwise demands.
19. Where the language of the statute is clear and unambiguous, it must be construed in its plain and literal sense, and no other interpretation is warranted. Applying the said principle to the present case, the word “period” cannot be read to mean an indefinite or open-ended duration dependent upon the happening of a future contingency — such as the realisation of outstanding dues from every allottee. To permit the substitution of a definite "period" with a conditional or contingent event — for example, recovery of all dues from flat purchasers — would amount to rewriting the statutory framework under the guise of interpretation. Such an approach would not only dilute the express mandate of Rule 9 but would render the statutory obligation of the promoter to convey title illusory and unenforceable. This Court cannot countenance such a construction which defeats the object of the legislation.
20. It is further well established that statutory obligations under the MOFA are not to be rendered nugatory or made subject to the volition of the promoter. In Jayantilal Investments v. Madhuvihar Co-operative Housing Society, (2007) 9 SCC 220, the Supreme Court unequivocally held that once the statutory obligations under Sections 10 and 11 of MOFA are triggered, the promoter cannot, by stipulating arbitrary or unilateral conditions, avoid the duty to convey title within the prescribed time. The Court observed that MOFA is a social welfare legislation intended to protect flat purchasers and must be interpreted in a manner which furthers its purpose.
21. A clause in the agreement for sale that seeks to defer the promoter’s duty to convey land until all dues from all allottees are realised introduces an element of uncertainty and arbitrariness, which is impermissible in the face of a statutory obligation cast in unequivocal terms. It would create an undue fetter on the rights of the cooperative society or the flat purchasers, who have otherwise complied with their obligations, and vest an unregulated discretion in the promoter to indefinitely postpone the transfer of title.
22. Such a condition would squarely offend the underlying object of MOFA, which is to ensure timely and effective protection of the rights of flat purchasers and to curb the exploitative tendencies often witnessed in builder-promoter arrangements. Where statutory duties are sought to be diluted by unfair contract terms, courts must intervene to restore parity and uphold the legislative intent.
23. Further, this Court finds that permitting a construction whereby the term “period” is substituted with an uncertain event would disproportionately tilt the balance in favour of the promoter and perpetuate the very mischief that the MOFA sought to remedy. The legislation was enacted to rectify the unequal bargaining power between promoters and flat purchasers, and any interpretation that reverses this remedial objective must be eschewed.
24. Thus, it must be held that the term “period” in Rule 9 signifies a definite, pre-determined, and reasonable span of time, and cannot be supplanted by an uncertain, contingent, or openended event. Any such clause which seeks to do so is inconsistent with the statutory framework and is, therefore, void to that extent.
25. Any clause in the agreement which seeks to override the statutory requirement of conveyance within the prescribed time would be void to the extent it frustrates the legislative mandate under MOFA. The Court further observed that once a society is registered and a majority of the purchasers have taken possession and fulfilled their obligations, the promoter cannot avoid conveyance by citing inter se contractual issues. Therefore, Clause 33 of the agreement, in so far as it purports to defer the execution of conveyance until the realization of dues from all purchasers, cannot prevail over Rule 9 of the MOFA Rules. A condition based on the occurrence of an uncertain future event — which is neither within the control of the society nor time-bound — cannot be equated with a definite "period" as envisaged in Rule 9. Such a reading would not only defeat the intent of the legislature but would also perpetuate imbalance in bargaining power between promoters and flat purchasers, contrary to the remedial purpose of the MOFA legislation.
26. Acceptance of the petitioner’s argument would render the statutory scheme under MOFA nugatory and place the right of the flat purchasers at the mercy of unilateral and indefinite conduct on the part of the promoter. Such interpretation would frustrate the very object of MOFA, which is to protect the interest of flat purchasers and ensure that promoters fulfil their obligations within a time-bound framework. Hence, in the absence of any specific and mutually agreed period to the contrary, the petitioner was under a statutory obligation to execute the conveyance deed within four months from the date of registration of respondent No.2-Society, i.e., by 7th September 2019. Admittedly, the petitioner failed to do so, and therefore the action initiated by respondent No.2-Society under Section 11 of MOFA was legally tenable.
27. In so far as the contention of the petitioner regarding the surrender of land admeasuring 2,849 square meters to the Pune Municipal Corporation is concerned, it deserves to be rejected. Respondent No.2-Society, in its affidavit-in-reply, has categorically stated that the said area was not part of the layout plan dated 24th December 2014, and consequently, not part of the land which was agreed to be conveyed to the Society. Further, it is well settled that the promoter is obliged to convey such land and constructed premises as were disclosed in the agreement for sale and the sanctioned plan in terms of Section 4 of the MOFA Act. Any subsequent obligation arising against the promoter, such as surrendering land to the Planning Authority, cannot be used as a ground to withhold conveyance of the area that was already agreed to be transferred. The promoter cannot deprive the Society of its right to obtain conveyance of the agreed property on account of obligations which are external to and subsequent to the agreement for sale. Thus, the objection raised by the petitioner on this ground is devoid of merit.
28. With regard to the objection of prematurity of the application under Section 11 of MOFA, the record reveals that respondent No.2-Society was registered on 7th May 2019 and the application for deemed conveyance came to be filed on 26th September 2019. Therefore, the application was filed after the lapse of four months from the date of registration of the Society, satisfying the time requirement under Rule 9 of the said Rules. Hence, the plea that the application was premature is factually incorrect and legally untenable.
29. It must be noted that the jurisdiction of this Court under Article 227 of the Constitution of India is limited to examining whether the findings of the subordinate authority are perverse, arbitrary or in breach of the principles of natural justice. In the present case, the Competent Authority has acted within its jurisdiction and in accordance with the provisions of MOFA and the applicable Rules. If the petitioner believes that any civil rights have been infringed as a consequence of the impugned conveyance, it is always open for the petitioner to avail appropriate civil remedies by instituting a suit before a competent civil court. However, no ground is made out for exercise of supervisory jurisdiction under Article 227 of the Constitution to interfere with the impugned order.
30. In view of the foregoing discussion, the writ petition is devoid of merit and is accordingly dismissed. No order as to costs.
31. All pending interlocutory application(s) stand disposed of. (AMIT BORKAR, J.)