Sanu Enterprises Through Partner ... vs Vikhroli Laxmi Apartments And Ors
2026 Latest Caselaw 2023 Bom

Bombay High Court

Sanu Enterprises Through Partner ... vs Vikhroli Laxmi Apartments And Ors on 24 February, 2026

Author: Amit Borkar

Bench: Amit Borkar

2026:BHC-AS:9308
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                        Shabnoor
                                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                           CIVIL APPELLATE JURISDICTION

                                                WRIT PETITION NO.491 OF 2022

                        Sanu Enterprises,
SHABNOOR
AYUB                    through its partner Popatlal H. Shah,
PATHAN                  Add.: 57-61, Kika Street, Mumbai 400 004               ... Petitioner
 Digitally signed by
 SHABNOOR AYUB
 PATHAN                                               V/s.
 Date: 2026.02.24
 12:14:31 +0530
                           1. Vikhroli Laxmi Apartments Coop.
                              Housing Society Limited,
                              Laxmi Apartments, Station Road,
                              Vikhroli (West), Mumbai 400 079
                           2. Shri Dharam Singh & Sons,
                              Add.: National Chemical Works,
                              Station Road, Vikhroli,
                              Mumbai 400 079
                           3. (a) Brijinder Singh
                              (b) Deepak Singh
                              (c) Devindarkaur Chawala
                              (d) Nirmalkaur Bindra
                              (e) Indrajeet Kaur
                              (f) Manjeet Kaur Kasan
                              (g) Poonam Modi
                              Address of 3(a) to 3(g), Flat No.20A,
                              Vikhroli Laxmi Apartments,
                              Vikhroli (West), Mumbai 400 079
                           4. Waryam Singh (HUF),
                              Address: 1404, Stellar Tower,
                              2nd Cross Lane, Lokhandwala
                              Complex, Andheri (West),
                              Mumbai 400 053




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    5. Jaylaxmi S. Vallabhdas,
       Pratapsingh Soorji Vallabhdas,
       Vikramsingh Soorji Vallabhdas
       Dilipsingh Soorji Vallabhdas
       Legal heirs of late Seth Soorji
       Vallabhdas and their legal heirs
       Address: Cutch Castle, Opera House,
       Bombay - 400 004
    6. The Competent Authority, District
       Deputy Registrar, Coop. Societies,
       Mumbai City (2) and also office of
       the Competent Authority under
       Section 5A of the MOFA, 1963
       Room No.201, 2nd Floor, Konkan
       Bhavan, CBD Belapur,
       Navi Mumbai 400 614.
    7. The Sub-Registrar of Assurances
       of Mumbai, under the provisions of
       the Registration Act, 1908, having
       office at Old Custom House, Fort,
       Mumbai - 400 001.
    8. The State of Maharashtra,
       Mantralaya, Mumbai 400 032
       through the Government Pleader, Civil
       Appellate Side, High Court, Mumbai               ... Respondents



 Mr. Ankit Lohia with Ms. Aditi Bhatt, Ms. Dimple Vora,
 and Mr. Darshil Desai i/by Markand Gandhi & Co., for
 the petitioner.
 Mr. Karl Tamboly i/by Mr. Rahul Mohite for respondent
 No.1.
 Mr. Y.D. Patil, AGP for respondent Nos.6 and 8 - State.




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                       CORAM             : AMIT BORKAR, J.

                       RESERVED ON       : JANUARY 21, 2026

                       PRONOUNCED ON     : FEBRUARY 24, 2026

 JUDGMENT:

1. The present petition under Article 226 of the Constitution of India takes exception to the legality, validity and propriety of the order dated 31st January 2020 passed by Respondent No. 6, namely the Competent Authority and District Deputy Registrar, Co- operative Societies, whereby the application filed by Respondent No. 1 under Section 11 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 came to be allowed and a certificate of unilateral deemed conveyance was granted in respect of the subject property. The petitioner challenges the said order on the ground that the Competent Authority acted without jurisdiction and in disregard of the earlier order dated 25th March 2014, thereby rendering the impugned decision unsustainable in law.

2. The Petitioner claims to be the owner and landlord of the immovable property bearing Survey No. 90-A, Hissa Nos. 13 (Part), 19 (Part), 22 (Part) and 26 (Part), together with C.T.S. No. 48/C, admeasuring originally 2752.10 sq. mtrs., subsequently reduced to 2416.2 sq. mtrs. on account of acquisition by the Bombay Municipal Corporation, situated at Station Road, Vikhroli, Mumbai, hereinafter referred to as "the Larger Property."

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3. Respondent No. 1 is a Co-operative Housing Society. Respondent No. 2 is a sole proprietorship concern of Mr. Dharam Singh and is stated to have constructed a building known as Laxmi Apartments. Respondent No. 3 are the heirs and legal representatives of the said Mr. Dharam Singh. M/s National Chemical Works, a sole proprietorship concern of Respondent No. 4, was the erstwhile lessee under the Petitioner. Respondent No. 5 are the legal heirs of late Seth Soorji Vallabhdas. Respondent No. 6 is the Competent Authority constituted under Section 5A of the Maharashtra Ownership of Flats Act, 1963. Respondent No. 7 is the Sub-Registrar of Assurances, and Respondent No. 8 is the State of Maharashtra.

4. It is the case of the Petitioner that one Mr. Dharam Singh Harnam Singh originally held leasehold rights in respect of the Larger Property for a period of 31 years and 3 months. During the subsistence of the said lease, Respondent No. 2 constructed a building known as Laxmi Apartments on a portion of the Larger Property admeasuring 1273.30 sq. mtrs., comprising basement, ground floor and four upper floors, hereinafter referred to as "the said Building." It is further stated that on 22nd September 1972, during the pendency of the lease, late Seth Soorji Vallabhdas, the original owner, executed a Deed of Conveyance transferring all his right, title and interest in the Larger Property in favour of New Dholera Shipping and Trading Co. Ltd.

5. Upon expiry of the aforesaid lease by efflux of time, New Dholera Shipping and Trading Co. Ltd., on 18th March 1983, executed a fresh Lease Deed in favour of M/s National Chemical

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Works through its sole proprietor Mr. Dharam Singh, for a further period of 30 years commencing from 15th October 1982 and ending on 14th October 2012. Thereafter, by a Deed of Conveyance dated 12th February 2003, New Dholera Shipping and Trading Co. Ltd. transferred all its right, title and interest in the Larger Property in favour of the Petitioner. The said conveyance was subsequently rectified and confirmed by a duly registered Deed of Rectification and Confirmation dated 11th January 2005.

6. As the lease period was nearing expiry by efflux of time, the Petitioner, by its letter dated 24th February 2012, called upon M/s National Chemical Works to hand over possession of the Larger Property on or before 14th October 2012.

7. Since possession was not handed over, the Petitioner instituted eviction proceedings being T.E. Suit No. 188/233 of 2012 before the Court of Small Causes at Bombay against National Chemical Works and Mr. Waryam Singh, Karta of his HUF and proprietor of National Chemical Works. During the pendency of the said proceedings, Respondent No. 1 filed an application for deemed conveyance bearing Application No. 406 of 2013 in respect of the said property. The predecessor of Respondent No. 6, by order dated 25th March 2014, rejected the said application. Subsequently, by judgment and decree dated 25th July 2018, T.E. Suit No. 188/233 of 2012 was decreed in favour of the Petitioner, directing M/s National Chemical Works and Respondent No. 4 to hand over vacant and peaceful possession of the Larger Property within a period of three months. Thereafter, on 16th January 2019, Respondent No. 1 once again filed an application being

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Application No. 44 of 2019 under Sections 5, 10 and 11 of the Maharashtra Ownership of Flats Act, 1963.

8. The Petitioner filed its reply and written submissions opposing the said application on 7th October 2019. By the impugned order dated 31st January 2020, Respondent No. 6, purportedly exercising powers under Section 5A of the Maharashtra Ownership of Flats Act, 1963, issued a certificate under Section 11(3) declaring that Respondent No. 1 was entitled to a unilateral deemed conveyance of the right, title and interest in respect of the said Building. Being aggrieved thereby, the present Petition has been filed.

9. The Petitioner contends that Respondent No. 1, by filing the present application, has sought to reagitate issues which were directly and substantially in issue in the earlier application filed under Section 11 of the Maharashtra Ownership of Flats Act, 1963, and which stood adjudicated upon by the Competent Authority by order dated 25th March 2014, whereby the said application came to be expressly rejected.

10. The Petitioner submits that a plain reading of the order dated 25th March 2014 demonstrates that the Competent Authority rejected the earlier application on two specific grounds, namely, that the lease period under the relevant lease deed had expired on 14th October 2012 and that a suit for eviction and recovery of possession had already been instituted by the Petitioner before the Court of Small Causes and was pending adjudication. It is, therefore, urged that the dispute sought to be raised in the application filed in 2019 stands concluded on merits

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by the prior adjudication.

11. The Petitioner further submits that Respondent No. 1 did not challenge the order dated 25th March 2014, as a result of which the said order has attained finality and has become binding upon all concerned parties. Consequently, the filing of a subsequent application before the same authority seeking identical reliefs is barred by the principles of res judicata.

12. In support of the aforesaid contention, the Petitioner places reliance on the judgment of the Supreme Court in M/s. Faime Makers Private Ltd. v. District Deputy Registrar, (2025) 5 SCC 772.

13. The Petitioner submits that the contention sought to be raised by Respondent No. 1 during the hearing, namely that there has been a change in circumstances, finds no foundation either in the subsequent application filed in 2019 for deemed conveyance or in the affidavit in reply filed before this Court. It is further contended that the said application does not disclose or even refer to the earlier application and the order of rejection passed therein, thereby amounting to suppression of material facts. No pleading regarding any change of circumstances is stated therein. Despite the Petitioner having specifically brought the earlier rejection to the notice of the Competent Authority, and despite such submissions being recorded in the impugned order, the authority failed to deal with the same while proceeding to allow the application.

14. The Petitioner submits, without prejudice to the above contentions, that the earlier order of rejection had taken note of

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the pendency of the civil suit before the Court of Small Causes. The subsequent decree passed in favour of the Petitioner cannot be construed as a change of circumstances conferring any fresh cause of action upon Respondent No. 1 to maintain a second application. On the contrary, Respondent No. 1, having accepted the earlier order, remains bound both by the findings therein and by the decree passed by the competent civil court. It is further submitted that the Competent Authority under MOFA does not possess any power of review. Reliance is placed on Kashish Park Reality Pvt. Ltd. v. State of Maharashtra (WP (St) No. 93004 of 2020) and Parmanand Builders LLP, Mumbai v. Competent Authority and Ors.

15. On the issue whether the Petitioner falls within the definition of "Promoter" under MOFA, the Petitioner submits that the statutory definition contemplates a person who constructs or causes to be constructed a building of flats for the purpose of sale, and includes such person's assignees. According to the Petitioner, the said definition does not encompass the Petitioner in the facts of the present case.

16. The Petitioner submits that the terms of the Lease Deeds dated 1st July 1951 and 18th March 1983 specifically required the lessee to obtain prior written permission before undertaking any construction and further mandated that upon expiry of the lease term, possession of the demised premises be handed over in the same condition as existing at the commencement of the lease. It is contended that neither the Petitioner nor its predecessor granted permission for construction of flats or for sale thereof.

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17. The Petitioner further submits that even assuming, without admitting, that any permission for construction had been granted, such permission was expressly subject to the condition that the developer and persons claiming through the developer would hold only leasehold rights limited to the tenure specified under the lease.

18. On the issue of expiry of the lease and institution of eviction proceedings, the Petitioner submits that the Lease Agreement dated 18th March 1983 was for a fixed tenure of 30 years commencing from 15th October 1982 and accordingly expired on 14th October 2012. Prior to expiry, the Petitioner issued due notice calling upon the lessee, namely National Chemical Works, to hand over possession. It is not in dispute that the lease was never renewed or extended thereafter.

19. The Petitioner submits that upon expiry of the lease, it instituted a civil suit for eviction and recovery of possession before the competent forum, which came to be decreed by judgment dated 25th July 2018 on the ground that the lease had expired by efflux of time.

20. It is further submitted that the Court of Small Causes has issued obstructionist notices to the occupants of the building, including members of Respondent No. 1, and such proceedings are pending before a competent civil court. In these circumstances, Respondent No. 1 cannot contend that the Petitioner is required to institute a separate suit regarding title, particularly when the earlier deemed conveyance application was rejected on the ground of pendency of such proceedings.

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21. The Petitioner submits that issues pertaining to title can be adjudicated only by a competent civil court and not by the Competent Authority exercising jurisdiction under Section 11 of MOFA. According to the Petitioner, once the earlier application was rejected, the proper remedy available to Respondent No. 1 was to challenge the said order or to institute appropriate civil proceedings.

22. The Petitioner submits that the attempt of Respondent No. 1 to distinguish the judgment in Faime Makers Pvt. Ltd. on the ground that liberty to file a suit had been granted in that case is misconceived. Merely because no such liberty was expressly granted in the present matter does not preclude Respondent No. 1 from adopting appropriate legal remedies. The principles laid down in the said judgment, therefore, squarely apply to the present case.

23. The Petitioner submits that this Court has consistently held that even in the case of deemed conveyance, what is conveyed is only the promoter's right, title and interest in the land and building. It is contended that neither the Petitioner nor its predecessors were parties to any agreements entered into with the alleged flat purchasers.

24. The Petitioner submits that even assuming, without admitting, that the developer was a promoter, it is only the developer who could be so regarded and not the Petitioner. It is further submitted that where the promoter possesses only leasehold rights, the society of flat purchasers can acquire no greater right than leasehold interest. Accordingly, the occupants

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claiming through the lessee cannot obtain rights superior to those held by the lessee.

25. The Petitioner submits that since the lease has expired and the eviction suit has been decreed, the occupants cannot now seek conveyance of the land itself, as such a claim would confer rights greater than those available to the lessee during the subsistence of the lease.

26. The Petitioner submits that the jurisdiction of the Competent Authority under MOFA is summary in nature and requires due application of mind. It is contended that the Competent Authority failed to examine the eligibility of Respondent No. 1 or scrutinise the relevant documents before passing the impugned order. In any case, the rights of the occupants are subject to the outcome of the pending execution proceedings.

27. The Petitioner further submits that Respondent No. 1 annexed incomplete copies of the agreements relied upon. Since MOFA mandates examination of such agreements to ascertain the rights and obligations of the parties, the failure to produce complete agreements ought to have resulted in dismissal of the application.

28. The Petitioner submits that during the pendency of the present writ petition, and in the course of proceedings before the Deputy District Registrar on 26th November 2020, the Petitioners were informed that registration of the conveyance would not be effected for a period of fifteen days. Notwithstanding the said representation and despite the pendency of the proceedings, the

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Respondents proceeded to execute the sale deed on 1st December 2020. Subsequently, by order dated 21st December 2020, this Court directed the parties not to act upon the said conveyance. It is further contended that the Respondents failed to notify the Petitioners regarding execution and registration of the deemed conveyance despite service of proceedings, and acted in breach of the requirement of prior notice under Section 106 of the Transfer of Property Act, 1882.

29. In view of the above, the Petitioner submits that the contention of Respondent No. 1 that the Petitioner is liable to discharge the obligations of a promoter under MOFA is wholly untenable. The Petitioner asserts that it is not a promoter within the meaning of MOFA and cannot be saddled with liabilities attached to such status.

REASONS AND ANALYSIS:

30. The application of these principles to proceedings under Section 11 of the Maharashtra Ownership of Flats Act assumes practical importance because the jurisdiction exercised by the Competent Authority is narrow and defined by statute. The authority is not expected to decide every dispute that parties may raise regarding title, ownership history or interpretation of private contracts. Its task is more limited. It has to examine whether the legal conditions required for grant of deemed conveyance are satisfied. In other words, the inquiry is focused on statutory compliance and entitlement under the Act. Therefore, only those issues which are necessary for granting or refusing deemed

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conveyance can be treated as directly and substantially in issue. Matters beyond that sphere, even if discussed during hearing, do not automatically attain finality.

31. In proceedings under Section 11 of MOFA, the central issues generally relate to statutory entitlement to conveyance. Questions such as whether the society is entitled under the Act, whether the promoter has failed to execute conveyance, and whether statutory conditions stand fulfilled form the heart of the inquiry. During arguments, parties may raise complex questions relating to ownership, rival claims between societies, or deeper title disputes. However, such issues often travel beyond the limited jurisdiction of the Competent Authority. If the authority makes observations on such matters merely as background reasoning, those observations may not attain finality as res judicata. These are matters better suited for adjudication by civil courts where parties can lead detailed evidence and obtain a full determination.

32. Therefore, while applying the principle laid down in Sajjadanashin Sayed v. Musa Dadabhai Ummer, (2000) 3 SCC 350 to the present case, the Court must carefully separate what formed the core of the earlier decision from what was merely explanatory or incidental. The earlier adjudication on entitlement to deemed conveyance constitutes the substantive foundation and is directly and substantially in issue. By contrast, issues which were secondary, illustrative or not essential to the final conclusion remain collateral. The law does not permit enlargement of finality beyond what was truly decided. This careful separation serves an important balance. It prevents reopening of matters which have

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already been conclusively determined, thereby preserving certainty and stability in adjudication. At the same time, it protects parties from being prevented from raising issues which were never truly adjudicated in the first place. The judgment in Sajjadanashin Sayed provides a structured and workable approach. It directs courts to look beyond the language used in the earlier order and to examine the real role played by each finding. Only after such examination can the doctrine of res judicata be applied fairly and correctly in proceedings under Section 11 of MOFA.

33. In Faime Makers (P) Ltd. v. Co-operative Societies (2025) 5 SCC 772, the Supreme Court has further clarified that the principle of res judicata is not confined only to judgments of civil courts. It applies equally to decisions rendered by quasi judicial authorities. When a statutory authority hears parties, considers documents, applies legal principles and delivers a reasoned decision, that decision has binding effect between the parties. It continues to bind even if one party believes it to be erroneous, unless it is set aside in appeal, revision or writ jurisdiction. The Deputy Registrar, while deciding an application under Section 11 of MOFA, functions in a quasi judicial capacity. He issues notice, hears rival parties and passes a reasoned order. Such an order is not administrative in nature. It is an adjudication. Consequently, the principle stated in Ujjam Bai v. State of U.P., 1962 SCC OnLine SC 8 and reaffirmed in Abdul Kuddus v. Union of India, (2019) 6 SCC 604 squarely applies.

34. The Supreme Court in Faime Makers has emphasised two aspects which are directly relevant. First, findings recorded by a

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quasi judicial authority cannot be reopened in a collateral manner or through a second round of proceedings between the same parties. Second, even if the earlier decision contains an error of fact or law, it remains binding unless set aside by a superior forum. A coordinate or successor authority cannot simply adopt a different view on the same issue. This principle safeguards consistency and prevents repetitive litigation before the same statutory forum. It is equally necessary to keep in mind the limited role of the Competent Authority under Section 11 of MOFA. The authority does not sit as a civil court to adjudicate title in its broadest sense. Its duty is confined to examining whether the promoter has failed to execute conveyance and whether the society or flat purchasers are entitled to unilateral conveyance under the statute. For this purpose, the authority examines the agreements for sale, sanctioned plans, layout of the property, description of the land and the statutory rights flowing therefrom. The inquiry is functional and limited, not exhaustive of all civil disputes.

35. The distinction explained in Sajjadanashin Sayed ultimately rests on one central test. The Court must ask whether the issue in question was necessary for the earlier decision and whether it formed the foundation of that decision. If it did, the issue becomes directly and substantially in issue and attains finality. If it was merely a step in reasoning or an incidental observation made while arriving at another conclusion, it remains collateral and does not bar future adjudication. In proceedings under Section 11 of MOFA, issues which are directly and substantially in issue ordinarily include the following. First, whether the applicant is a duly

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constituted co-operative housing society or association of flat purchasers entitled to invoke the Act. Second, whether agreements for sale were executed in accordance with Section 4 and whether the statutory period for execution of conveyance has expired. Third, whether the promoter has failed or refused to execute conveyance despite statutory obligation. These issues go to the root of the relief sought and necessarily require determination. On the other hand, certain matters remain collateral or incidental in Section 11 proceedings. These include complicated title disputes between promoters and third parties based on rival conveyances, inheritance or partition claims. Questions regarding validity of prior development agreements between landowners and promoters also generally fall outside the limited scope. Internal disputes within the society, such as membership or election issues, do not ordinarily arise for determination. Similarly, findings regarding zoning violations, FSI calculations or planning irregularities are incidental unless they are strictly necessary to identify the portion of land to be conveyed. Monetary disputes, claims for damages or accounting between promoter and purchasers are also outside the core jurisdiction of the Competent Authority. Such matters must be left to appropriate civil proceedings where a fuller inquiry is possible.

36. A careful and plain reading of the order dated 25th March 2014 makes it clear that the Competent Authority did not merely defer or keep the application pending for a later stage. The order reflects exercise of adjudicatory mind. The authority examined the material placed before it and recorded clear findings on facts

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which it considered relevant for deciding the application. It specifically noted that the lease governing the property had already expired by efflux of time and that, as a consequence, ownership had vested with the petitioner. These were not passing remarks made in the course of narration. They were findings recorded after considering the legal position emerging from the documents and the submissions of parties. On the basis of these findings, the authority reached the conclusion that deemed conveyance could not be granted in favour of the applicant society. The reasoning, therefore, was not procedural or temporary in nature. The conclusion flowed directly from the findings on entitlement. In other words, the authority treated the expiry of the lease and the ownership position as factors going to the root of the claim. If the authority had intended only to postpone consideration, it would have simply stated that the matter would be kept in abeyance pending the outcome of other proceedings. Instead, the order contains a clear evaluative conclusion that the statutory relief could not be granted in the circumstances then existing.

37. Thus, the rejection of the application rested on two reasons. The first reason concerned substantive entitlement, namely whether the applicant could seek deemed conveyance in view of the expiry of lease and vesting of ownership with the petitioner. The second reason related to the pendency of civil litigation, where issues connected with possession and rights over the property were already under examination by a competent court. The first reason therefore reflects a considered decision based on

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finding which formed the operative basis of rejection. If an authority records findings that directly influence the grant or refusal of relief, those findings assume legal importance. They cannot later be reduced to incidental observations merely because another ground, such as pendency of a suit, was also mentioned. The structure of the order shows that the authority intended to reject the application on substantive as well as procedural considerations. Therefore, the reasoning recorded therein must be understood as forming the foundation of the decision. The argument advanced by Respondent No. 1 that the earlier order was purely procedural therefore cannot be accepted in its entirety. If the order had merely stated that the application was premature due to pendency of suit, the position might have been different. However, the authority went further and recorded findings on entitlement based on expiry of lease and ownership. Once such findings were recorded and the application rejected, the order assumed the character of an adjudication, even if rendered by a quasi judicial authority exercising limited jurisdiction.

38. The Society has relied on the disposal of the Small Causes Suit as a change in circumstances. This submission requires careful consideration. The earlier order rejected the application partly because the suit was pending. The subsequent decree may indeed remove that particular obstacle. However, the first ground of rejection, namely absence of entitlement due to expiry of lease and ownership position, remained untouched. Disposal of the suit did not alter that foundational finding. A change in one circumstance cannot automatically erase a substantive adjudication on

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entitlement. Therefore, the second application could not reopen issues already decided.

39. It is equally necessary to clarify that this conclusion does not amount to adjudication of absolute title. The present decision proceeds only on the effect of the earlier order and the jurisdictional limits of the Competent Authority. Questions of ownership, rights flowing from leases, or claims arising from conveyance deeds remain open to be examined by competent civil courts, where parties may lead evidence and seek appropriate relief.

40. In view of the foregoing discussion and for the reasons recorded hereinabove, the following order is passed:

(i) The Writ Petition succeeds.

(ii) The impugned order dated 31st January 2020 passed by Respondent No. 6, granting unilateral deemed conveyance in favour of Respondent No. 1 Society under Section 11 of the Maharashtra Ownership of Flats Act, 1963, is quashed and set aside.

(iii) Consequently, the conveyance deed executed and registered pursuant to the said order on 1st December 2020 also stands quashed and set aside.

(iv) It is clarified that this Court has not adjudicated upon the question of title to the property in its wider sense, and all contentions of the parties in that regard are expressly kept open to be agitated before the competent civil court in

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appropriate proceedings.

(v) It shall be open to Respondent No. 1 Society to institute appropriate civil proceedings for enforcement of its rights, if so advised, and such proceedings shall be decided on their own merits and in accordance with law.

(vi) Rule is made absolute in the above terms. There shall be no order as to costs.

(AMIT BORKAR, J.)