M/S. Blue Heaven Co-op Housing Society Ltd v. M/s. Punit Construction Company Pvt. Ltd. & Ors.

15. At the outset, Dr. Chandrachud learned counsel for the Respondent Nos.[2] to 4 raised a preliminary objection of maintainability on the ground of availability of an alternate remedy of filing civil suit. He would submit that the order of grant or rejection of Patil-SR (ch) 7 of 46 the deemed conveyance does not conclude the issue of right, title and interest in the property and the Petitioner has the alternate remedy of filing the suit and therefore this Court may not exercise its powers under Articles 226 and 227 of the Constitution of India. In support of the preliminary objection, he relies upon the following decisions: Subhash Ramchandra Navare v. Premji Meghji Rambia[1]; Shimmering Heights CHS Ltd v. State of Maharashtra;2 and Mehboob Ali Humza v. Dist. Sub Registrar, Mumbai[3].

16. To counter the submissions, Mr. Walawalkar, learned Senior Advocate appearing for the Petitioner would point out that the decisions on which reliance has been placed arise out of grant of deemed conveyance and Petitions were at the instance of promoters and in that context the Courts have held that the grant of deemed conveyance does not conclude the issue of right title and interest in the property. In support, he relies upon following decisions: Vishnu Krishna Dhadphale v. Competent Authority and District[4]; and New Manoday CHS Ltd v. Uday Madhavrao Jagtap;5 1 2020 SCC OnLine Bom 316. 2 WP No. 3129/2016 (Bom HC), dtd. 6-4-2016. 3 WP No.1170/2014 (Bom HC) dtd, 24-6-2016.

17. Mr. Khandeparkar, Learned Counsel appearing for Respondent No.1 would support Mr. Walawalkar and would submit that this Court has taken that view in a challenge by the promoters to grant of deemed conveyance claiming a right in the project and in that context, the Courts have held that if the contractual rights are claimed, the appropriate remedy is to file civil suit. He would submit that the Competent Authority has non-suited the Petitioner by going into the title dispute and thus there is an error in jurisdiction. ON MERITS:

18. Mr. Walavalkar would submit that this Court in the earlier remand vide order dated 30th January, 2020 has clearly set out the remit of inquiry by Competent Authority and despite thereof the Competent Authority travelled way beyond its jurisdiction. He would further submit that the order of Consumer Forum directing conveyance still stands and has attained finality. He would point out the documents submitted to CIDCO for the purpose of obtaining development permissions annexed at page Nos.142 to 218 which are signed by the deceased Shripat Patil and deceased Ambo Gadge. He would further submit that the civil Suit filed by the Respondent Nos. 5 to 8 does not seek any declaration that the documents submitted to CIDCO for permissions are fraudulent documents. He submits that as the necessary permissions and approvals have been applied for and Patil-SR (ch) 9 of 46 granted in name of the owners, the construction was caused by the owners of property who are promoters.

19. He would submit that pursuant to proper resolution the Society was registered and application for deemed conveyance was filed. He would further submit that notice for demolition was issued in the year 2017, building was vacated in the year 2018, water and electricity connection was discontinued in August 2019 and the demolition had taken place in December 2022. He would further submit that the application seeks enforcement of MOFA obligations and the demolition of building is irrelevant. He submits that the development was completed in the year 2006 and came to be occupied after receiving occupation certificate, which was to the knowledge of the owners and no action was taken by the owners to challenge authority of the Respondent No. 1 till filing of deemed convenance application in the year 2018.

20. He has taken this Court in detail through the findings of the Competent Authority and would submit that the Competent Authority has practically decided the issues of civil suit. He submits that the Petitioner was entitled to deemed conveyance as the development agreement was acted upon, the building was constructed pursuant to the permissions granted by the CIDCO and the agreements with the flat purchasers were registered agreements. He submits that the Patil-SR (ch) 10 of 46 Competent Authority failed to notice that the owners have acquiesced in the development. He submits that by coming to a finding that as the development agreement was unstamped, unregistered agreement, the Respondent No.1 did not have any right to sell the flats, the Competent Authority has travelled beyond its jurisdiction and granted prayer clause (f) of the civil suit. He would further submit that as the owners are promoters and the flat purchasers agreements were not executed pursuant to power of attorney granted under the Development Agreement, the non registration of development agreement is immaterial.

21. He points out that one of the reasons for rejection was defect in the application, in which case it was incumbent on the Competent Authority under the Rules framed under MOFA to call upon the Petitioners to rectify the defect.

22. Mr. Khandeparkar, learned counsel for Respondent No.1 would draw attention of this Court to Section 2(c) of MOFA which defines “promoter” and would submit that as the building was caused to be constructed by the owners, the owners are promoters. He would further submit that under Rules framed under MOFA, the agreement is required to be in mandatory Form-V and Clause 13 of the said agreement which is non derogable, provides for registration of Society by the promoter within a period of 4 months and the execution of Patil-SR (ch) 11 of 46 conveyance in favour of the society and in default of obligation, the Competent Authority has the necessary jurisdiction. He would further point out that under Section 16 of MOFA, the provisions of MOFA have been given an overriding effect over the provisions of the Transfer of Property Act, 1882.

23. He would further submit that the defect, if any, in the application cannot constitute a ground for rejection as Rule 13(c) of the Rules enjoins upon the Competent Authority to issue notice in Form-VIII to rectify the defects and thereafter to admit and register the application. He submits that as, notices were already issued on 22nd June 2018 the same implies that the application was complete in all respects. He submits that in any event the defect in the application was in respect of certain “Blanks” which defect is irrelevant.

24. He submits that the rights under MOFA were already created by execution of the flat purchaser agreements and there is an order of the Consumer Forum directing the Respondent No.1 to redevelop the property. He submits that considering that the building is demolished, the conveyance of the land will have to be granted which will include the development potential of the land. The statutory rights of the Petitioner-society cannot be defeated by reason of demolition by passage of time as the same would amount to the Promoters taking advantage of their default. He submits that under section 11(5) of the Patil-SR (ch) 12 of 46 MOFA, the obligation of promoter is required to be fulfilled by the Competent Authority and therefore the matter may be remanded only for the purpose of issuing of the certificate which cannot be done by this Court in exercise of powers Article 227 of the Constitution of India. In support of his submissions he relies upon the following decisions: Ravi Jagganath Agarwal v. Prince Tower CHS Ltd[6]; Zora Singh v. J. M. Tandon[7]; and

25. Per contra Dr. Chandrachud, learned counsel for the Respondent Nos.[2] to 4 would draw the attention of this Court to the Agreement to Lease executed by the owners with CIDCO. Pointing out to Recital (D) at page 106 and clause (1) at page 107 and clause (7) at page 113, he submits that the said agreement only grants license to the owners to construct a building, pursuant to which lease was to be executed for a period of 60 years. He would therefore submit that the Petitioners cannot claim conveyance and at the highest what could be granted were leasehold rights. He would further submit that the development agreement executed between the owners and Respondent No.1 was an unregistered sham agreement and the provisions of Section 49 of the Registration Act would come into play. He submits that the permissions applied in the name of Ambo Gadge at page 148 with CIDCO was entirely without the knowledge and consent of Ambo 6 2024 SCC OnLine Bom 1015. 7 1971(3) SCC 834. Patil-SR (ch) 13 of 46 Gadge. He would submit that the flat purchasers agreement based on which the Conveyance is sought was not executed by Ambo Gadge nor power of attorney was executed by Ambo Gadge in favour of Respondent No.1 to execute the flat purchasers agreement. He would submit that the grant of deemed conveyance in favour of the Petitioner-society would result in divesting CIDCO of its ownership rights.

26. He would submit that a tripartite agreement was required to be executed between Ambo Gadge, Shripat Patil, CIDCO and the Respondent No.1. He submits that Ambo Gadge expired in the year 2010 and in the year 2016 the Consumer Complaint was instituted in the name of Ambo and his wife, and it is not shown whether his wife had been served with the copy of said complaint. He would further point out that there is a fraud committed in the registration of Society as 192 members are shown and for purpose of registration, the requirement was of 51% and only 75 members had signed the application for registration. He would further point out that the the authorisation for filing application under Section 11 of MOFA was pursuant to resolution of the Society of 24th June 2018 whereas the indemnity bond executed by the Chairman of Petitioner-society was notarised on 12th June 2018. He would submit that the issues as to whether the conveyance or lease could be granted by examining the Patil-SR (ch) 14 of 46 agreement with CIDCO, fraudulent registration of agreement, resolution etc, would bar the jurisdiction of the Competent Authority and the application for deemed conveyance has rightly been rejected.

27. Mr. Godbole, learned Senior Advocate appearing for the Respondent Nos.[5] to 8 would submit that the Agenda at page 249 was not filed before the Competent Authority for the meeting to be held on 11th June 2018. He would further point out the application under Section 11(3) of the MOFA and would submit that stamps are dated 12th June 2018 and the accompaniments to application at page 621 refer to meeting held on 24th June 2018. He submits that the documents have been notarized on 12th June 2018 whereas the meeting is shown to have been held on 24th June 2018, which creates doubt about authorisation.

28. He would further submit that agreement between the Owners and CIDCO was an agreement to lease and not agreement of lease and there is no tripartite agreement mandatorily to be executed in case of transfer of the land by allottees in favour of 3rd person. He submits that unless there is compliance by execution of necessary agreements with CIDCO, the Respondent No.1 does not have any right in the said property which could be conveyed to Petitioner-society. He submits that even the Owners do not have leasehold rights but an inchoate right to get the lease deed. He would further point out the Patil-SR (ch) 15 of 46 replies filed by Respondent No.3 and the Respondent Nos. 2.[1] to 2.[3] and would submit that all these issues were placed for consideration before the Competent Authority. He submits that the documents executed were fraudulent documents.

29. He would further submit that the accompaniments to the application required to be submitted under Rule 12 in Form VII and which read along with the GR of 2018 provided for a list of documents which were not tendered along with the application and therefore one of the grounds for rejection of application was the defect in the application. He would further submit that under section 11(3) and 11(4) of MOFA, the Competent Authority is empowered to verify the authenticity of documents. Pointing out to the definition of “flat” given under section 2(a)(i) of MOFA, he submits that as the building is not in existence the Competent Authority has rightly rejected the application.

30. Mr. Surel Shah, learned Senior Advocate appearing for the Respondent Nos.[7] and 8 submits that under Section 11 of MOFA, the promoter is required to convey his right, title and interest in the land and building and as the building is demolished, the application for deemed conveyance only in respect of land is not maintainable. He would further point out that Clause 7 of agreement provides that the Corporation will grant and licensee will accept a lease and therefore Patil-SR (ch) 16 of 46 the agreement was an agreement to enter into a lease. He would further submit that the Competent Authority cannot direct CIDCO to execute a lease in favour of the Society in exercise of powers under Section 11 of MOFA. He submits that there is collusion in filing of the application as the Respondent No.1, i.e., the builder as well as the Applicant is one and the same.

31. In rejoinder, Mr. Walavalkar would submit that what is sought is conveyance of a right and CIDCO will remain the owner of property and there will only be the transfer of right to get the leasehold rights of CIDCO. He would submit that GR dated 22nd June 2018 is not applicable as the application for deemed conveyance was filed on 12th June 2016. He submits that the rights already vested in the Society to obtain conveyance by virtue of the Consumer Forum’s order, which was prior to demolition of building. He submits that there is no relevancy of the aspect of dual ownership as what is sought is the transfer of leasehold rights.

32. Mr. Khandeparkar would submit that it is settled position that mere pendency of civil suit will not result in rejection of an application for deemed conveyance and the title dispute will be decided in the civil suit. He would further submit that Competent Authority has held that Director of Respondent No.1 was earlier appointed as Chairman of the Patil-SR (ch) 17 of 46 Society, however, thereafter elections were held and new committee has came in and therefore deficiency stands cured. He submits that Section 11 of the MOFA casts a statutory obligation for the benefit of Society to transfer the rights of promoter which rights have vested in the Society in the year 2006 when the occupation certificate was issued and the right to obtain conveyance arose. He submits that the promoter cannot be permitted to use the disadvantage of demolition of building to his advantage to wriggle out of the statutory obligations. He submits that as the rights under MOFA were created, the existence of building is irrelevant. He would submit that for the purpose of grant of lease, the construction had to be completed within period of 4 years which has been done. He submits that tit is not the stand of CIDCO that as there is a breach, there cannot be any execution of tripartite agreement.

33. Mr. Sakhadeo, learned counsel appearing for the CIDCO would submit that as per the terms of agreement to lease, upon the erection of building within a period of 4 years, lease will have to be executed. He would submit that there is no privity of contract between CIDCO with the Society and the owner was a mere licensee. Patil-SR (ch) 18 of 46 REASONS AND ANALYSIS: Preliminary Objection:

34. I shall first deal with the preliminary objection relating to the maintainability of Petition raised by Dr. Chandrachud as regards the alternate remedy of filing a suit. The present Petition has been filed under Article 227 of Constitution of India against the order of Competent Authority rejecting the application for deemed conveyance. Under Article 227 of Constitution of India, the High Court has the power of superintendence over all Courts and tribunals throughout the territories in relation to which it exercises jurisdiction and can interfere where there is refusal to exercise jurisdiction. It is well settled proposition of law that the existence of an alternate remedy is not per se a constitutional bar to exercise jurisdiction under Article 226/227 of Constitution of India. The issue is whether the remedy of filing a suit is an alternate remedy which will question the maintainability of the Petition at the threshold. The challenge in the present Petition is to the refusal of the Competent Authority to exercise the jurisdiction vested in it under Section 11 of MOFA. A catena of decisions have held that the grant of deemed conveyance does not conclude the issue of right title and interest in the property in respect of which deemed conveyance has been granted and aggrieved parties are entitled to institute a suit before the Civil Court to substantiate their claim. The Patil-SR (ch) 19 of 46 law laid down is that in event the parties seeks to establish any right title and interest in the subject property, the grant of deemed conveyance will not come in the way of the civil proceedings as it does not amount to concluding the issue of title in the property. The Court refuses to entertain the Petition under Article 226/227 against a challenge to the order of grant of deemed conveyance where the issues pertaining to right, title and interest in property are raised in which case the parties are relegated to the filing of civil suit to establish their right in the property. Accepting the contention of Dr. Chandrachud will amount to laying fetters on the powers under Article 226/227 of Constitution of India. In my view, the remedy of filing a civil suit to conclude the issue of title is an appropriate remedy to which parties can be relegated and not an alternate remedy which will question the very maintainability of the Petition under Article 227 of Constitution of India. In the decisions of Subash Ramchandra Navare (supra) and Shimmering Heights CHS Ltd (supra) and Mehboob Ali Humza (supra), the challenge was by the promoters to the grant of deemed conveyance claiming contractual rights in the subject property and in that background this Court refused to exercise the jurisdiction under Article 226/227 and relegated the parties to filing of civil suit. None of the decisions relied upon by Dr. Chandrachud lay down as an absolute proposition of law that the filing of civil suit is the only Patil-SR (ch) 20 of 46 remedy available against the orders passed under Section 11 of MOFA, in which event the rule of self imposed restraint should be invoked. The preliminary objection is, thus, liable to be rejected.

PROCEEDINGS BEFORE THE COMPETENT AUTHORITY:

35. Alleging non compliance of the statutory obligations, the Petitioner through its Chairman Jimmy Narendra Patel and Secretary Rajesh Ravjibhai Patel filed an application on 12th June, 2018 under Section 11(3) of MOFA seeking certificate entitling the Petitioner to unilateral deemed conveyance of the subject plot. Following two rounds of remand by the High Court to the Competent Authority, the Competent Authority by the impugned order dated 18th January, 2023 rejected the application for deemed conveyance. It is however not necessary to burden the judgment with the details of the previous litigation leading to de novo hearing by the Competent Authority.

36. The Application was resisted by the legal heirs of Ambo Gadge and Shripat Laxman Patil broadly on following grounds: (a) The application filed under Section 11 of MOFA suffers from several defects. (b) The Agreement of Assignment cum Sale dated dated 15th May, 2003 in favour of the Respondent No.1 is an unstamped, unregistered fraudulent document not executed by the owners.

(c) The Respondent No.1 got executed 26 agreements of sale of flats in the year 2016 in favour of its Directors or associate concerns. Patil-SR (ch) 21 of 46

(d) There is no tripartite agreement executed between the original allottees and CIDCO for valid transfer/assignment of lease. (e) There is no privity of contract between the original allottees and flat purchasers. (f) All documents submitted to CIDCO for permissions including transfer application dated 23rd March, 2004 for transfer of plot to Respondent No.1 are forged documents.

FINDINGS OF THE COMPETENT AUTHORITY:

37. Broadly summarizing, the Competent Authority rejected the application for the following reasons: [a] The Agreement of Assignment cum Sale cum Development dated 15th May 2003 being an unregistered unstamped notarised document and not as per the transfer scheme of CIDCO did not create any rights in the Respondent No 1 or the flat purchasers. [b] There is no material on record to substantiate the appointment of Jimmy Patel as Chairman as per the Bye-laws and as per Clause (A) (1)(iii) of GR dated 22nd June, 2018. The resolution is dated 24th June, 2018 and the application has been filed on 12th June, 2018 which creates a doubt about the authorisation to file the Application. [c] The Director of Respondent No.1 developer and the Chairman of Petitioner-Society through whom the Application for deemed conveyance are one and same person. Patil-SR (ch) 22 of 46 [d] The commencement certificate and occupation certificate have been issued in name of Ambo Gadge and Laxman Patil. The owners not being the signatories to the flat purchasers agreement and the flat purchaser’s agreement having being executed by Respondent No.1developer without the owner’s consent and without any power of attorney is not binding upon the owners. [e] Some of the flats have been sold by the developer even after disconnection of water and electricity connection for a consideration of Rs. 1,00,000/ and lesser market value is shown. [f] The Applicants have suppressed the fact of demolition of the building in October, 2022 and has not approached the Authority with clean hands. [g] The application under Section 11(3) of MOFA is defective due to absence of requisite accompaniments, certain blanks in the documents and containing incorrect and incomplete information. [h] There is no tripartite agreement between CIDCO and Ambo Gadge and Laxman Patil and no rights can be created by an unregistered document. Patil-SR (ch) 23 of 46 STATUTORY FRAMEWORK OF MOFA:

38. Under the statutory scheme of Section 11 of MOFA, an obligation is cast upon the “Promoter” to take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which are registered either as co-operative society or company or association of apartments, his right, title and interest in the land and building by executing a document in that regard in accordance with the agreements executed under Section 4 of MOFA.

39. In event of non compliance of the obligation by the Promoter to convey his title to the Society, Sub-Section (3) of Section 11 permits the co-operative society to approach the Competent Authority seeking certificate that the Society is entitled to have the unilateral deemed conveyance executed in their favour and to have it registered.

40. Under Sub Section (4) of Section 11, the Competent Authority, upon receipt of an application through members of co-operative society under sub-section 3, is required to conduct an enquiry and after verifying the authenticity of the documents submitted, by giving the Promoter a reasonable opportunity of being heard, after arriving at a satisfaction as to the entitlement of the Society is required to issue a certificate conveying the right, title and interest of the promoter in the land and building in favour of the Applicant as deemed conveyance. Section 11 of MOFA reads thus: Patil-SR (ch) 24 of 46 “11. Promoter to convey title, etc., and to execute documents, according to the agreement. (1) A promoter shall take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which is registered either as a co-operative society or as a company as aforesaid or to an association of flat takers or apartment owners, his right, title and interest in the land and building, and execute all relevant documents therefor in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power. (2) It shall be the duty of the promoter to file with the Competent Authority, within the prescribed period, a copy of the conveyance executed by him under sub-section (1). (3) If the promoter fails to execute the conveyance in favour of the Cooperative society formed under section 10 or, as the case may be, the Company or the association of apartment owners, as provided by sub-section (1), within the prescribed period, the members of such Co-operative society or, as the case may be, the Company or the association of apartment owners may, make an application, in writing, to the concerned Competent Authority accompanied by the true copies of the registered agreements for sale, executed with the promoter by each individual member of the society or the Company or the association, who have purchased the flats and all other relevant documents (including the occupation certificate, if any), for issuing a certificate that such society, or as the case may be, Company or association, is entitled to have an unilateral deemed conveyance, executed in their favour and to have it registered. (4) The Competent Authority, on receiving such application, within reasonable time and in any case not later than six months, after making such enquiry as deemed necessary and after verifying the authenticity of the documents submitted and after giving the promoter a reasonable opportunity of being heard, on being satisfied that it is a fit case for issuing such certificate, shall issue a certificate to the Sub-Registrar or any other appropriate Registration Officer under the Registration Act, 1908, certifying that it is a fit case for enforcing unilateral execution, of conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the applicant, as deemed conveyance. (5) On submission by such society or as the case may be, the Company or the association of apartment owners, to the Sub- Patil-SR (ch) 25 of 46 appointed under the Registration Act, 1908, the certificate issued by the Competent Authority alongwith the unilateral instrument of conveyance, the Sub-Registrar or the concerned appropriate registration Officer shall, notwithstanding anything contained in the Registration Act, 1908, issue summons to the promoter to show cause why, such unilateral instrument should not be registered as 'deemed conveyance' and after giving the promoter and the applicants a reasonable opportunity of being heard, may on being satisfied that it was fit case for unilateral conveyance, register that instrument as, 'deemed conveyance'.”

41. In the context of the present case, the definition of promoter under Section 2(c) of MOFA assumes significance and reads thus: "promoter" means a person and includes a partnership firm or a body or association of persons whether registered or not who constructs or causes to be constructed a block or building of flats or apartments for the purpose of selling some or all of them to other persons, or to a company, co-operative society or other association of persons, and includes his assignees; and where the person who builds and the person who sells are different persons, the term includes both.”

42. In exercise of powers under Section 15 of MOFA, The Maharashtra Ownership Flats (Regulation of the Promotion of Construction etc.) Rules, 1964 have been framed. Rule 5 prescribe the particulars to be contained in the agreement which is required to be in accordance with Form V. Clause 13 of the Model Agreement, which clause is non derogable, provides for the covenant as to conveyance which reads thus:

43. Rule 13 of Rules of 1964 prescribes the procedure for scrutiny of applications and notice to parties and Sub-Rules (1) and (2) of Rule 13 read thus:

UNDISPUTED FACTS OF PRESENT CASE:

44. The undisputed facts borne out from the record is that the Petitioner Society is constructed on land admeasuring 4000 square meters being GES Plot No 8A, Sector No 35, Kamothe Phase II, Navi Mumbai, Taluka Panvel, District Raigad. The said plot was agreed to be leased by Respondent No.10-CIDCO vide Agreement to Lease dated 25th November, 2002 executed between Respondent No 10 and Ambo Balya Gadge and Shripat Laxman Patil and license was granted to Ambo and Shripat to construct building/s for residential/commercial use. The approvals and sanctions for construction were granted by CIDCO in name of Ambo Gadge and Shripat Patil. The building came to be constructed by the Respondent No 1 Developer, who entered into agreements for sale with the individual flat purchasers. On 20th February, 2006, the Respondent No.10 issued Occupancy Certificate in name of Ambo Gadge and Shripat Patil. The Certificate of Registration of the Petitioner Society was issued on 24th May, 2018. During the period August, 2022 to December, 2022, the building came to be Patil-SR (ch) 28 of 46 demolished pursuant to order of demolition issued by the Planning Authority being dilapidated.

WHETHER THE OWNERS ARE PROMOTERS AND BOUND BY THE FLAT PURCHASER’S AGREEMENTS:

45. The debate in the present case would centre upon the right of the flat purchasers to enforce the MOFA obligations against the Owners. There is no opposition from Respondent No 1 Developer to grant of conveyance to the Petitioner. The Petitioner has been nonsuited by Competent Authority by casting a doubt upon the right of the Respondent No. 1 to carry out construction and execute the flat purchasers agreement, to which the Owners are not signatories, on basis of unregistered unstamped agreement dated 15th May 2003.

46. The source of right of the Owners to the subject property, is the Agreement to Lease dated 27th April, 2022, the execution whereof has not been disputed by the Owners. By the said agreement, what was granted to the Owners was a license to enter upon the subject plot and construct the building within the prescribed period of four years and upon certification thereof, the Owners acquired the right to obtain an Agreement of Lease in their favour.

47. In execution of the rights granted under the license, the Petitioner Society came to be constructed. The various permissions and approvals for the construction came to be granted by CIDCO in the Patil-SR (ch) 29 of 46 name of the owners and was pursuant to the Agreement to Lease executed by CIDCO in favour of the Owners upon applications filed by the Owners with CIDCO containing their signatures. Although the construction was carried out by the Respondent No 1, the sanctions were obtained in the name of the Owners.

48. As discussed above, the MOFA obligations are imposed on the Promoter, which expression has been defined in Section 2(c) as the the person or entity which constructs or causes to be constructed a block or building of flats for purpose of selling some or all of them to other person.

49. The Application for deemed conveyance is resisted by the Owners by disowning the execution of development agreement dated 15th May, 2003 executed with the Respondent No.1-developer and labelling the documents submitting to CIDCO as fraudulent. Even if the contention as regards the Agreement dated 15th May, 2003 being unregistered unstamped and fraudulent is accepted for sake of arguments and the agreement is dis-regarded, the factum of the various permissions and approvals being granted in the name of the Owners cannot be discarded without the same being set aside by a Competent Court.

50. The Agreement to Lease dated 25th November, 2002 has not been disputed by the Owners which makes it incumbent to erect the Patil-SR (ch) 30 of 46 building within prescribed period of four years. It is therefore difficult to digest that inspite of the mandatory condition, no steps were taken by the Owners to cause the construction in order to obtain the lease hold rights. It is also difficult to comprehend and accept the silence and inaction on part of the Owners during the period from the execution of the Agreement in the year 2002 till the resistance to the deemed conveyance in the year 2018.

51. For the Owners to be covered by the definition of Promoter, it had to be seen whether the construction was caused by the Owners. The plethora of documents such as the application for Development Permission dated 5th June, 2003 submitted by the Architect in name of Ambo Gadge & Ors, the commencement certificate issued in name of Ambo Gadge and Shripat Patil and the Occupancy Certificate issued in name of Ambo Gadge and Shripat Patil leads to the inevitable conclusion that the construction was at the instance of the Owners.

52. There is nothing more which is required to satisfy the precise definition of Promoter which includes the person or entity who causes the construction of building/s. It is very well for the Owners to disclaim the construction carried out by the Respondent No.1 by disputing the factum of execution of development agreement, however, as all approvals and permissions stand in the name of the Owners, which have not been set aside by any Competent Court, the Owners are Patil-SR (ch) 31 of 46 covered by the definition of Promoter under Section 2(c) of MOFA.

53. Although the execution of Agreement of Assignment cum Sale cum Development dated 15th May, 2003 is disputed, there is on record the application dated 23rd July 2004 seeking permission from CIDCO for transfer of the said plot in favour of the Respondent No.1, which application has been signed by both the owners. Along with the application, the allotment letter as well as the requisite indemnity bond was executed which is also signed by owners. Prior to the grant of occupancy certificate in the year 2006, the application was made to CIDCO in the year 2004 was for transfer of said plot in favour of the Developer which would indicate the knowledge of the owners about the development on plot. The permission to transfer has been granted by CIDCO vide order dated 9th October, 2006. Although it is sought to be contended that these documents are fraudulent documents and not signed by the owners, in the civil suit filed in the year 2019 there is no prayer seeking cancellation of these documents as being fraudulent. Cumulative consideration of the documents on record would inevitably lead to the conclusion that the Owners caused the construction of the Petitioner-Society.

54. The definition of expression “Promoter” is of widest amplitude and is so defined to ensure that the intention of Legislature to enact MOFA, which was to curb the menace of sundry abuses, malpractices Patil-SR (ch) 32 of 46 and difficulties relating to the promotion of the construction of, and the sale and management and transfer of flats taken on ownership basis, is achieved. The Owners fall within the definition of “Promoter” under Section 2(c) of MOFA and are bound to convey their right title and interest in the land and building in accordance with the flat purchaser’s agreement. The Owners cannot be permitted to contest the execution of the Agreement with the Developer and thereby question the right of the flat purchasers to obtain deemed conveyance of the land and building.

55. There has to be specific pleadings of fraud and nothing has been demonstrated which will even prima facie indicate fraud in obtaining various permissions from CIDCO for the construction. In any event, it is not the function of Competent Authority to go into the validity of the permissions. It was sufficient for grant of deemed conveyance that all permissions and approvals were issued by CIDCO in the name of the Owners and thus the Owners fall within the definition of promoter.

56. Viewing the dispute from another angle, upon a reading of the agreement to lease entered into between the CIDCO and owners, there was an obligation to erect the buildings within a period of 4 years and if the owners seek to disown the construction carried out, it will amount to breach of conditions of the agreement to lease. In that event, even the owners cannot be said to have a right to get an Patil-SR (ch) 33 of 46 agreement of lease in their favour from the CIDCO in respect of the said plot and consequently no right to even contest the application for deemed conveyance.

57. The Competent Authority lost sight of the definition of Promoter under Section 2(c) of MOFA and while accepting the factual position of permissions and sanctions as well as the occupation certificate being issued in name of Owners, failed to appreciate that the Owners would then fall within the definition of Promoter and would be bound by the flat purchaser’s agreement. Once the Owners are held to be promoters, they are bound by MOFA agreements and the non registration of the agreement of assignment cum development cum sale dated 15th May 2003 becomes immaterial for grant of relief of deemed conveyance.

58. Perusal of the flat purchasers agreement discloses recitals referring to the agreement to lease dated 25th November 2002 as well as the agreement of assignment-cum-sale-cum-development dated 15th May 2003 executed in favour of the developer and also makes reference to the commencement certificate annexed at Exhibit-A to the application, which is issued in the name of owners and it is based on this assurance and representation that the approvals have been issued in name of the Owners pursuant to an agreement to lease Patil-SR (ch) 34 of 46 executed by CIDCO,, which rights have been assigned by the Owners in favour of developer by an agreement dated 15th May 2003, that the flat purchasers have been convinced to invest in the project. It is now too late for the owners to do a volte face and say that they were unaware of any development being carried out on their plot of land and that the agreement executed with the developer is fraudulent document and no permission was obtained from CIDCO by them. That would amount to 166 flat purchases being rendered homeless after having parted with valuable consideration, which cannot be countenanced. The issue as regard the fraudulent nature of documents or right, title and interest of the owners is an issue to be decided in the civil suit and cannot be a ground to non-suit the Petitioners.

VALIDITY OF THE IMPUGNED ORDER OF COMPETENT AUTHORITY:

59. The remit of inquiry by the Competent Authority in adjudicating an application under Section 11 of MOFA has been succinctly laid down by this Court in Mazda Construction Company v. Sultanabad Darshan CHS Ltd[8] which view has been consistently followed in latter decisions. Paragraph 20 of the said decision lays down as under: “To my mind, reading of Sections 10 and 11 together with Section 5A would make it amply clear that what is to be performed by the Competent Authority is a duty and obligation which the promoter is to perform in law. That is to convey the title and execute the documents according to the agreement. If that is the duty which is to be performed by the

Patil-SR (ch) 35 of 46 promoter, but which he fails to perform, then, the Competent Authority steps in to fulfil it. That is a duty towards the flat purchasers and which duty cannot be avoided except at the cost and pains of legal proceedings including a criminal prosecution. In these circumstances and when sections 10 and 11 are read together and harmoniously with the preceding sections including those which contain the particulars of the agreement, then, it becomes absolutely clear that what has to be conveyed even by a deemed conveyance, which is an unilateral act and which enables the flat purchasers to acquire the Promoter's right, title and interest in the land and the building. Therefore, it cannot be said that an unilateral deemed conveyance conveys something more than what belongs to the Promoter. Section 11(1) provides for conveyance of Promoter's right, title and interest in the land and building as is clear from the words “his right, title and interest….” appearing therein. I am not in agreement with Mr. Samdani that there are no guidelines guiding and enabling the Competent Authority to grant a deemed conveyance and therefore, the powers are likely to be abused or exercised arbitrarily in every such case. There are inbuilt checks and safeguards inasmuch as what is to be issued is a certificate entitling a unilateral deemed conveyance. It is not a document which stands alone or is a distinct transaction. It is a grant or conveyance in terms of what the agreement between parties stipulates and provides for being conveyed to the flat purchasers. Therefore, the Applicant is permitted to apply to the Competent Authority u/s 11(3) and such application is to be accompanied by true copies of the registered agreements for sale executed by the Promoter with each individual member/flat purchaser and other relevant documents. It is to further that and to insist on the promoters fulfilling their obligations within the prescribed period, but noticing that their failure has resulted in hardship to flat purchasers, that the Legislature has stepped in. To my mind, this is not a power which can be exercised by the Competent Authority in ignorance of or by brushing aside the earlier provisions and contents of the agreement with the flat purchasers. Equally, the Competent Authority has to take into consideration the contents of other relevant documents.”

60. Section 11(4) of MOFA confines the inquiry to examine the existence of a registered Society, the members of which have entered into flat purchasers agreement under Section 4 of MOFA and to look into the covenants in the agreement and after arriving at a finding of Patil-SR (ch) 36 of 46 non compliance by the Promoter, to step into the shoes of promoter and to comply with the obligations.

61. The Competent Authority being tasked with the duty to grant Certificate for execution of Unilateral Deemed Conveyance, in accordance with the terms of the Flat Purchasers Agreement, the covenant in the agreement assumes significance. Clause 36 of the said agreement reads as under: “the Developers shall endeavour to have the said property transferred and conveyed in favour of the association / society in respect of the said property and the said property and the building erected thereon within the prescribed period time from the date on which the Developers has sold and received payment for all the premises and sold and handed over possession of the premises to the respective members/ purchaser whichever is later PROVIDED THAT the Developers has been paid and has received full consideration amount payable by all the Premises Holder.”

62. Once the non performance of obligations as envisaged by the MOFA is established, the Competent Authority is mandated to comply with the promoter’s obligations. It is not open for the Competent Authority in the limited extent of 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 ground of validity of the documents.

63. The conspectus of the findings of Competent Authority is that the Agreement of Assignment executed on 15th May 2003 being an Patil-SR (ch) 37 of 46 unregistered unstamped notarised document and not as per the transfer scheme of CIDCO did not create any rights in the Respondent No.1 or the flat purchasers. The documents submitted are incomplete documents containing blanks. Despite notice being issued by planning authority for vacating the dilapidated premises during the period from 20th July 2016 to 3rd August 2016, 26 flat purchasers agreement were executed for a sum of Rs.1,00,000/- only, and more than 30 tenements/commercial shops are in the name of directors of the Respondent No.1-developer. There was suppression of the fact of demolition of building and conveyance under Section 11(1) of MOFA can be of the land and building. The building is not in existence and the authenticity of the agreements is pending before the civil Court.

64. The rejection of the application by arriving at the above findings, in my view, goes way beyond the jurisdiction of Competent Authority. It was not necessary to consider the validity of Agreement of Assignment dated 15th May, 2003 as all permissions such as the commencement certificate and the occupancy certificate were issued in name of the Owners and having caused the construction, the Owners were Promoters under MOFA and bound by the flat purchasers agreement. For the same reason the finding of the Competent Authority that there is no privity of contract between the owners and the flat purchasers cannot be accepted. Patil-SR (ch) 38 of 46

65. The right of Respondent No.1 to enter into flat purchasers agreement was not an issue to be considered by the Competent Authority when it noticed that the permissions were obtained by the Owners making them Promoters. The flat purchasers cannot be caught in the cross-fire between the developer and the Owners and be deprived of their entitlement to deemed conveyance where non compliance of MOFA obligations is established. Learned Single Judge of this Court has in New Manoday CHS Ltd (supra) held that if any person claims that promoter is not the owner in respect of the land on which building is constructed, it is for that person to institute civil suit and establish his rights to the land. Pendency of such title disputes cannot be a ground for not conveying land under Section 11 by the Competent Authority. The authenticity and validity of the Agreement is an issue to be decided by the Civil Court. The manner of sale of the flats could not be gone into by the Competent Authority under Section 11 of MOFA. The Competent Authority has ventured in the title dispute between the parties by holding that the development agreement is not validly executed and therefore no rights accrue to the flat purchasers. The rights of the flat purchasers flow from the statutory obligations under MOFA which includes the owner as promoter.

66. As far as the validity of appointment of Chairman who is said to be director of Respondent No.1-developer is concerned, the Patil-SR (ch) 39 of 46 conveyance, if any, would be in the name of Society and not in the name of any individual member and therefore whether the chairman has been validly elected or not is an issue beyond the jurisdiction of Competent Authority. In any event, any defect in authorisation stands cured by a new committee being appointed. Further, the statutory provisions does not bar the developer from purchasing flats in the building and having done so, becomes member of the Society and would not create an embargo on filing an application under Section 11(3) of MOFA.

67. As regards the finding on the demolition of building, Mr. Khandeparkar is right in submitting that the right to obtain the conveyance was triggered in the year 2006 as Section 11 of MOFA imposes an obligation on the promoter to complete his title and convey his right, title and interest in the land and building in accordance with the agreement executed under Section 4 of MOFA and if no period is agreed upon, then within the prescribed period of 4 months from the date of registration of Society. It is therefore clear that the subsequent event of demolition of building, pursuant to a statutory notice, will not extinguish either the right of the flat purchasers to obtain the conveyance of land or obligation of the promoter to convey the same to the flat purchasers. The promoters cannot commit default of their statutory obligations and then turn the Patil-SR (ch) 40 of 46 default to their advantage by denying right of conveyance by claiming that the demolition of building has extinguished the right of the flat purchasers to obtain the conveyance. Adopting such an approach will giving a leeway to the defaulting promoters to deliberately delay the compliance of their statutory obligations and then prejduice the rights of the flat purchasers on the ground of occurrence of subsequent adverse events.

68. The questioning of the authority for filing the application for the reason that the resolution authorising the Chairman and Secretary to file the application for deemed conveyance was passed on 24th June 2018 whereas the indemnity bond as well as the affidavits have been notarized on 12th June 2018 cannot be sustained, once the Competent Authority had admitted the application and issued notices and the application having gone through two rounds of remand by the High Court. Rule 13 of the Rules under MOFA tasks the Office of Competent Authority to scrutinise the application presented and after satisfying itself that the person presenting it has the authority to do so and that it conforms with the provisions of MOFA Act and Rules to permit the registration of application. An opportunity to rectify the defects is given by sending notice in Form-VIII In the present case, no such Form- VIII notice was issued to the Petitioner so as to enable them to rectify the defects and the issuance of notice to the parties thus implies the Patil-SR (ch) 41 of 46 completion of the application. In the absence of granting an opportunity to the Petitioners to rectify the alleged defect, there can be no adverse finding on the said issue.

69. The sale of flats by the Developer to the family members and associate concerns at an alleged undervalued rate is not an issue which can be considered in an adjudication under Section 11 of MOFA. There is no embargo placed by MOFA upon the Promoter-Developer to purchase the flats in the developed building and while registration of Deemed Conveyance, the deficit stamp duty on the flats, if any, can be recovered by revenue authorities. The Competent Authority in its limited jurisdiction is not required to go into the validity of the flat purchasers agreement.

70. The decision of Shree Chintamani Builders v. State of Maharashtra[9] clarified the position laid down in Mazda Construction (supra) that the issuance of deemed conveyance will not conclude the right, title and interest of the parties and it is open for a civil suit to be filed to establish the right, title and interest which the owners have done in the present case. However, the filing of civil suit will not come in to the way of Competent Authority to discharge its duty under Section 11 of the MOFA. The Competent Authority has taken into consideration extraneous grounds of validity of development

RELIEF TO BE GRANTED:

71. The Affidavit in reply filed by CIDCO states that the subject plot was vested in CIDCO by virtue of Land Acquisition Unit Case/Award No 150 and in lieu of the land acquisition under 12.5% Scheme, the subject plot was allotted to Ambo Gadge and Shripat Patil vide allotment letter dated 27th September, 2002. An Agreement to Lease dated 25th November, 2002 was executed between CIDCO and Ambo Gadge and Shripat Patil. Pertinently, the Deponent further states that presently, the subject plot stands in the name of Ambo Gadge and Shripat Patil.

72. The Agreement to Lease came to be executed between CIDCO and the Owners on 25th November, 2002 by which license was granted to the Owners to construct the building/s on the subject plot. Clause 7 of the Agreement provides for grant of lease of land and building for period of 60 years by CIDCO upon the certification of the construction being erected in accordance with the terms.

73. Coming to the statutory entitlement of the Petitioner, it is only the Promoter’s right which can be conveyed to the Petitioner. The Owners had the right under the Agreement to Lease to obtain lease of land and building for period of 60 years form CIDCO upon certification of the construction. The occupancy certificate has been granted and Patil-SR (ch) 43 of 46 thus the right to obtain lease from CIDCO has ripened. In its Affidavit in reply there is no contest by CIDCO to grant of the lease in respect of subject land. It is this right of the Owners to obtain assignment of lease which will have to be granted. By grant of deemed assignment of lease, there is no interference in the ownership rights of CIDCO as there is no objection demonstrated by CIDCO which would have disentitled the Owners to obtain assignment of lease.

74. Clause 13 of the Model Form-V Flat Purchaser Agreement, reproduced hereinabove, provides for transfer of right, title and interest of the Owner / Promoter together with the building by obtaining or executing the necessary conveyance or assigning of lease of the said land in favour of the Society. It is, therefore, clear that it is not only the conveyance of the land which can be granted but also the assignment of lease. In the present case, although the application may have been made for execution of a deemed conveyance, the Competent Authority is entitled to mould the relief and grant certificate for assignment of lease in favour of the Society. CONCLUSION:

75. The Competent Authority exercises limited jurisdiction while adjudicating an application under Section 11 of MOFA, which jurisdiction does not extend to delving into the legality and validity of Patil-SR (ch) 44 of 46 the agreements executed between the parties. In case of title dispute, the remedy is to file a substantive suit for title. In the present case, the Application for deemed conveyance has been rejected primarily on the ground that the Agreement between the Owners and the Developers did not grant any right to the Developer or the flat purchasers being an unregistered unstamped document. Apart from the fact that the validity of the Agreement could not be decided in exercise of limited jurisdiction, the planning permissions having been obtained in name of the Owners, the Owners were “Promoters” under MOFA and were bound by the flat purchaser’s agreement. The interse dispute between the Owner and Developer cannot be permitted to jeopardize the right of the flat purchasers to obtain conveyance of promoter’s right under MOFA. The title dispute is an issue to be adjudicated in the Civil Court in the pending Civil Suit, and rights will be crystallized in civil proceedings. The Competent Authority having noticed non compliance of the statutory obligations by Promoter had no option but to step in and fulfill the statutory obligations. Instead of doing so, the Competent Authority has delved into the title dispute of the Owners and Developers and rejected the Petitioner’s application.

76. In the present case, the Competent Authority has non suited the Petitioners on a title dispute which constitutes an error in jurisdiction warranting interference under Article 227 of the Constitution. Patil-SR (ch) 45 of 46 Resultantly, Petition succeeds. In light of the discussion above, the following order is passed:: ORDER: (a) The impugned order dated 18th January, 2023 passed by the Competent Authority in Deemed Conveyance Application No.6236 of 2023 is hereby quashed and set aside. (b) The Deemed Conveyance Application No.6236 of 2023 is remitted to the Competent Authority for the limited purpose of issuance of Certificate entitling the Petitioner to leasehold rights in respect of the subject plot.

77. Rule is made absolute in above terms.

78. In view of the disposal of Writ Petition, nothing survives for consideration in the pending civil/interim applications and the same stand disposed of. [Sharmila U. Deshmukh, J.]

79. At this stage, Mr. Godbole, learned Senior Advocate appearing for the Respondent Nos.[5] and 6 seeks stay to the present judgment. The judgment is stayed for a period of six weeks from date of uploading the judgment on official website. [Sharmila U. Deshmukh, J.] Patil-SR (ch) 46 of 46 Designation: PS To Honourable Judge