[Cites 13, Cited by 0]
Bombay High Court
M/S. G. K. Developers Through Its ... vs The State Of Maharashtra Thr Minister Of ... on 17 March, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:12845
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.1647 OF 2025
ATUL 1. G.K. Developers, PAN AAFFG5688P
GANESH
KULKARNI through it's partner
Digitally signed by
ATUL GANESH
KULKARNI a) Hari Nichaldas Jeswani
Date: 2026.03.17
12:27:57 +0530
PAN AAOPJ7173R, Age 46 years,
b) Gurubaksh Vishandas Pehlani,
PAN AAVPP4251H
c) Vinod Premchand Chandwani,
PAN ADVPC0520B
having registered office at Pimpri,
Camp, Pimpri Pune 411 017
2. Dhondabai Shankar Bhise, Age 80
3. Krishna Shankar Bhise, Age 55 years,
4. Rajaram Shankar Bhise, Age 45 years,
5. Ashok Shankar Bhise, Age 50 years,
6. Chhabubai Baban Gade, Age 65 years
7. Shila Krishna Bhise, Age 35 years
8. Sagar Krishna Bhise, Age 33 years
9. Sunanda Ashok Bhise, Age 30 years,
10. Kalpana Rajaram Bhise, Age 20 years
11. Bhimabai Jallinder Bhise,
Age 60 years, petitioner Nos.2 to 11
R/at Pimple Saudagar, Pune 411 027
through their PoA holder
G.K. Developers, through its
Authorized partner
Hari Nichaldas Jeswani Age 46 years,
R/at Pimpri Camp, Pimpri,
Pune 411 017 ... Petitioners
1
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V/s.
1. The State of Maharashtra,
through Minister of Cooperation,
copy to be served upon office of
Government Pleader, High Court,
Mumbai.
2. District Deputy Registrar, Cooperative
Societies, having its office at
Sakhar Sankul, Shivaji Nagar,
Pune 411 005.
3. Dwarka Flora Residency Phase-2
Cooperative Housing Society,
A housing society registered under the
provisions of the Maharashtra Coop.
Societies Act, 1960 having its office
at Survey No.161/2, CTS 1334(P),
1335 (P), Pimple Saudagar,
Pune 411 027 ... respondents
Dr. Abhinav Chandrachud with Mr. Pavan Patil and Mr.
Shubham Saraf for the petitioners.
Ms. Snehal S. Jadhav, AGP for respondent Nos.1 and 2-
State.
Mr. Shreeprasad Parab for respondent No.3.
CORAM : AMIT BORKAR, J.
RESERVED ON : FEBRUARY 23, 2026.
PRONOUNCED ON : MARCH 17, 2026
JUDGMENT:
1. Rule. Rule is made returnable forthwith by consent of the
parties.
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2. By the present writ petition filed under Article 226 of the
Constitution of India, the petitioners have challenged the
impugned Judgment and Order dated 28 November 2024 passed
by respondent No.2 in Revision Application No.580 of 2023,
whereby the authority has affirmed the order granting unilateral
deemed conveyance in favour of respondent No.3.
3. The facts giving rise to the present writ petition, in brief, are
as follows. The petitioners entered into a Joint Development
Agreement with the land owner in the year 2005, which was
registered as Document No.7930 of 2005 (Haveli No.V). Along
with the said agreement, a registered Power of Attorney bearing
No.7931 of 2005 (Haveli No.V) dated 31 October 2005 was also
executed in favour of the petitioners. The development pertained
to land admeasuring 00 Hectares 22 R from Survey No.161/2,
including an area of 240.87 square meters reserved for road,
situated at Village Pimple Saudagar, Taluka Haveli, District Pune. It
is the case of the petitioners that all necessary permissions for
development were obtained from the Pimpri Chinchwad Municipal
Corporation. The municipal authority issued Commencement
Certificate No. B.P./Pimple Saudagar/41/2009 dated 25 September
2009. Prior thereto, the Collector, Pune had granted Non-
Agricultural permission by order dated 2 March 2009 bearing NA
Order No. PMH/NA/SR/721/2008. On the basis of these
permissions, the petitioners developed the land in accordance with
the sanctioned plan issued by the Pimpri Chinchwad Municipal
Corporation. Upon completion of construction, the petitioners
received Completion Certificate No.161 of 2010 dated 31
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December 2010.
4. The petitioners constructed two wings consisting of forty two
residential flats and eight shops in the said project. Thereafter, the
project was submitted to the provisions of the Maharashtra
Apartment Ownership Act, 1970. For this purpose, the petitioners
executed and registered a Deed of Declaration bearing No.8363 of
2010 dated 18 August 2010, thereby establishing an Apartment
Condominium for the said scheme under Section 2 of the
Maharashtra Apartment Ownership Act in the name and style of
"Dwarka Flora Residency Phase II Apartments". The petitioners
further state that after execution and registration of the Deed of
Declaration, individual Apartment Deeds were executed and
registered in favour of the respective apartment purchasers. It is
further stated that after establishment of the Apartment
Condominium, the petitioners executed a Sale Deed transferring
the land on which the scheme was developed in favour of the said
condominium. The Sale Deed dated 13 April 2011 was duly
executed, stamped and registered at Haveli No.V at Serial No.3487
of 2011. According to the petitioners, by virtue of the said
conveyance, ownership and title of the land admeasuring 00
Hectares 22 R, including the FSI relatable to the area of 240.87
square meters, forming part of Survey No.161/2 of Village Pimple
Saudagar, Taluka Haveli, District Pune, stood vested in the
Apartment Condominium.
5. The petitioners further state that subsequently the apartment
owners resolved to withdraw the scheme from the provisions of
the Maharashtra Apartment Ownership Act and to submit the same
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to the provisions of the Maharashtra Co-operative Societies Act.
Accordingly, the apartment owners executed and registered a Deed
of Declaration dated 11 April 2022, thereby withdrawing the
scheme from the operation of the Maharashtra Apartment
Ownership Act. After such withdrawal, respondent No.3 came to
be incorporated and registered as a co operative housing society.
The society was registered under Registration No.
NA/PNA(3)/HSG(TC)/24922/2022 dated 7 October 2022.
6. Thereafter, respondent No.3 society filed an application
before respondent No.2 under Section 11(3) of the Maharashtra
Ownership Flats Act, 1963 seeking issuance of a certificate for
unilateral deemed conveyance on 20 December 2023. The
petitioners thereafter submitted an application dated 19 March
2024 before the District Deputy Registrar raising an objection
regarding the maintainability of the said application. The
petitioners contended that in law a person can transfer only such
title as he possesses. According to the petitioners, the title of the
land had already been transferred in favour of the Dwarka Flora
Residency Phase II Apartment Condominium by the registered
Deed of Conveyance dated 13 April 2011. Hence, it was contended
that no right, title or interest remained with the petitioners which
could again be conveyed by way of deemed conveyance. The
petitioners state that respondent No.2, by order dated 28
November 2024, issued a Unilateral Deemed Conveyance
Certificate along with a Certificate of Entitlement to Register the
same. Being aggrieved by the said order, the petitioners have filed
the present writ petition.
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7. Clause 7 and Clause 12 of the Sale Deed executed in favour
of the condominium contain certain stipulations reserving future
rights in favour of the developer.Under clause Clause 7 it is
provided that Vendor Group No.2 shall remain entitled to utilize
the balance Floor Space Index available in respect of the said land
as on the date of execution of the Sale Deed. The clause further
stipulates that Vendor Group No.2 shall also be entitled to claim
and utilize any additional FSI that may be granted in future by the
competent planning authority in respect of the said land. It is also
stated that the purchaser shall not claim any right in respect of
such FSI or TDR that may become available subsequently.
However, the clause also clarifies that Vendor Group No.2 shall not
be entitled to undertake construction on the terrace of the
buildings which form the subject matter of the Sale Deed. Clause
12 provides that Vendor Group No.2 shall have a preferential right
to undertake redevelopment of any structure standing on the
property that has been submitted to the provisions of the
Maharashtra Apartment Ownership Act by virtue of the Deed of
Declaration. The clause further clarifies that if redevelopment of
the property becomes necessary in future, the first opportunity to
undertake such redevelopment shall be offered to Vendor Group
No.2 on mutually agreed terms and conditions. Only in the event
that Vendor Group No.2 declines such an offer would the
purchaser be entitled to undertake redevelopment independently
or through any other agency.
8. Dr. Chandrachud, learned Advocate appearing for the
petitioners, submitted that it is a settled principle of property law
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that the same property cannot be conveyed twice, as such
duplication would undermine the certainty and clarity of title.
According to him, respondent No.2 failed to properly consider the
provisions of Section 14 of the Maharashtra Apartment Ownership
Act. The said provision permits removal of a property from the
operation of the Act by execution of an appropriate instrument by
all apartment owners, subject to the consent of holders of charges
or encumbrances. Upon such removal, the property is deemed to
be owned in common by the apartment owners, and the undivided
interest of each apartment owner continues in proportion to the
percentage of interest previously held by such owner in the
common areas and facilities. It was further submitted that, in view
of the legal position under Section 14 of the Maharashtra
Apartment Ownership Act, the title of the property had already
vested in the body representing the apartment owners. In such
circumstances, execution of a second conveyance in respect of the
same property would not be legally permissible. He contended that
a mere change in the form or constitution of the organization
managing the housing scheme cannot result in extinguishment or
invalidation of the title that had already vested in the earlier entity.
9. Learned counsel further submitted that the proceedings
before respondent No.2 were summary in nature and therefore the
authority could not have adjudicated upon the validity or effect of
the terms contained in the conveyance deed. According to him,
such issues fall within the exclusive jurisdiction of the competent
civil court. He submitted that the conveyance deed dated 13 April
2011 was duly executed and registered and continues to remain
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valid and binding in law unless set aside by a competent court. It
was contended that respondent No.2 misapplied the provisions of
the Maharashtra Apartment Ownership Act, 1970 and, in effect,
treated the registered conveyance as having been annulled, which
the authority had no power to do. It was also submitted that
respondent No.2 acted contrary to the scheme of the Registration
Act, 1908 by permitting a subsequent deed of declaration to
undermine the legal effect of the registered conveyance deed
executed in the year 2011. According to the petitioners, the
question whether the conveyance deed of 2011 is invalid or
ineffective can be determined only by a competent civil court.
Respondent No.2, therefore, exceeded the limits of his jurisdiction
in proceeding in a manner that virtually rendered the earlier
conveyance ineffective.
10. Per contra, Mr. Parab, learned Advocate appearing for
respondent No.3 society, submitted that an apartment
condominium created under the Maharashtra Apartment
Ownership Act is not a body corporate having perpetual succession
and a common seal. According to him, such a condominium does
not possess a separate legal personality capable of independently
holding or disposing of property or entering into contracts. He
submitted that the petitioners attempted to transfer a defective
and incomplete title by imposing several restrictions in the Sale
Deed dated 13 April 2011, including restrictions relating to
utilization of balance FSI, additional FSI, and FSI or TDR that may
become available in future. The deed also contained stipulations
granting the petitioners a preferential right of redevelopment in
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future. It was therefore submitted that the petitioners had not
transferred full and complete title, which was contrary to the basic
legal principle that a person can convey only such rights as he
legitimately holds. In these circumstances, respondent No.3 society
approached respondent No.2 seeking grant of complete
conveyance, and respondent No.2 accordingly allowed the
application for deemed conveyance. Learned counsel further
submitted that mere removal of the property from the provisions
of the Maharashtra Apartment Ownership Act under Section 14,
followed by formation of a co operative housing society, does not
automatically result in vesting of the property in the society.
According to him, the restrictions contained in the Sale Deed dated
13 April 2011 amounted to reservation of rights by the petitioners
which were inconsistent with the statutory scheme under the
Maharashtra Ownership Flats Act, 1963 and the requirement that
conveyance must be in accordance with the sanctioned plans. On
this basis, it was submitted that the order granting deemed
conveyance was justified and that the writ petition deserves to be
dismissed.
REASONS AND ANALYSIS:
11. I have heard learned counsel for both sides. I have read the
papers and the judgments cited. The narrow question is can the
promoter keep residual development rights forever by clauses like
Clause 7 and Clause 12 of the 2011 Sale Deed while the flat
purchasers assume responsibilities of ownership.
12. For the purpose of deciding the issue involved in the present
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matter, it becomes necessary to refer to the relevant statutory
provisions which govern the rights and obligations of the promoter
and the flat purchasers. Section 14 of the Maharashtra Apartment
Ownership Act and Sections 10 and 11 of the Maharashtra
Ownership Flats Act, 1963 read as under.
"14 (1) All the apartment owners may remove a property
from the provisions of this Act by an Instrument to that effect
duly executed: Provided that, the holders of all charges and
other encumbrances affecting any of the apartments consent
thereto or agree, in either case by instrument duly executed,
that encumbrances be their charges transferred to the
percentage of the undivided interest of the apartment owner
in the property as herein after provided; or
(2) Upon removal of the property from the provision of
this Act, the property shall be deemed to be owned in
common by the apartment owner. The undivided interest in
the property owned in common which shall appertain to
each apartment owner shall be the percentage of undivided
interest previously owned by such owner in the common
areas and facilities."
10. Promoter to take steps for formation of co-operative
society or company.
(1) As soon as a minimum number of persons required to
form a Co-operative society or a company have taken flats,
the promoter shall within the prescribed period submit an
application to the Registrar for registration of the
organisation of persons who take the flats as Co-operative
society or, as the case may be, as a company; and the
promoter shall join, in respect of the flats which have not
been taken, in such application for membership of a Co-
operative society or as the case may be, of a company.
Nothing in this section shall affect the right of the promoter
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to dispose of the remaining flats in accordance with the
provisions of this Act:
Provided that, if the promoter fails within the prescribed
period to submit an application to the Registrar for
registration of society in the manner provided in the
Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of
1961), the Competent Authority may, upon receiving an
application from the persons who have taken flats from the
said promoter, direct the District Deputy Registrar, Deputy
Registrar or, as the case may be, Assistant Registrar
concerned, to register the society:
Provided further that, no such direction to register any
society under the preceding proviso shall be given to the
District Deputy Registrar, Deputy Registrar or, as the case
may be, Assistant Registrar, by the Competent Authority
without first verifying authenticity of the applicants, request
and giving the concerned promoter a reasonable opportunity
of being heard].
(2) If any property consisting of building is constructed or
to be constructed and the promoter submits such property to
the provisions of the Maharashtra Apartment Ownership Act,
1970 (Mah. XV of 1971), by executing and registering a
Declaration as provided by that Act] then the promoter shall
inform the Registrar as defined in the Maharashtra Co-
operative Societies Act, 1960 (Mah. XXIV of 1961),
accordingly; and in such cases, it shall not be lawful to form
any co-operative society or company.
11. Promoter to convey title, etc., and execute documents,
according to 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
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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 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 Co-operative 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
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Registration Officer under the Registration Act, 1908 (16 of
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-Registrar or the concerned appropriate Registration
Officer appointed under the Registration Act, 1908 (16 of
1908), the certificate issued by the Competent Authority
along with the unilateral instrument of conveyance, the Sub-
Registrar or the concerned appropriate registration Officer
shall, notwithstanding anything contained in the Registration
Act, 1908 (16 of 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'."
13. The present controversy mainly concerns the legal
consequences flowing from two statutes, namely the Maharashtra
Apartment Ownership Act and the Maharashtra Ownership Flats
Act, 1963. These enactments were introduced to regulate the
relationship between a promoter and the persons who purchase
flats from him. They also lay down how and when the ownership
of the land and building must finally pass from the promoter to the
purchasers.
14. Section 14 of the Maharashtra Apartment Ownership Act
deals with a situation where a property that was once governed by
that Act is later removed from its operation. The section provides
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that the apartment owners may remove the property from the
provisions of that Act by executing a proper instrument to that
effect. However, the Act provides that if any charges, loans, or
other encumbrances exist on the apartments, the holders of such
charges must give their consent before the property is withdrawn
from the Act. The reason behind this requirement is that where a
property is subject to liabilities, those liabilities must not be
disturbed without the consent of the concerned parties. Sub
section (2) of Section 14 explains what happens once the property
is removed from the provisions of the Act. It states that after such
removal the property will be treated as being owned in common
by the apartment owners. Each apartment owner will then hold an
undivided share in the property. The extent of this share
corresponds to the percentage of undivided interest that the owner
previously held in the common areas and facilities of the building.
The Act recognises that although the legal arrangement governing
the property may change, the real ownership remains with the
apartment owners themselves. The common portions of the
building and the land continue to belong jointly to them in
proportion to their respective shares.
15. In the present case it is not in dispute that the property was
initially submitted to the provisions of the Maharashtra Apartment
Ownership Act through execution of a Deed of Declaration.
Subsequently, the apartment owners decided to withdraw the
property from the operation of that Act and instead form a
cooperative housing society. This is the stage where Section 14
assumes significance. The section clarifies that even after such
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withdrawal the ownership rights do not revert back to the
promoter. the property continues to belong collectively to the
apartment owners. The ownership itself remains with those who
purchased the flats.
16. It is also necessary at this stage to consider Section 10 of the
Maharashtra Ownership Flats Act, 1963. This provision places a
statutory duty upon the promoter to take steps for formation of a
co operative society or company of the flat purchasers. The Act
recognises that when a number of persons purchase flats in the
same building, they must have a collective body to manage the
property and protect their common interests. Section 10 therefore
requires the promoter, once a sufficient number of flats are sold, to
submit an application to the Registrar for registration of a co
operative society or company consisting of the flat purchasers. The
provision also clarifies that the promoter must join the application
in respect of the flats which are still unsold. This means that the
promoter becomes a member of the society in relation to the flats
that remain in his ownership. At the same time, the section does
not take away the promoter's right to sell the remaining flats. Thus
the Act ensures that the flat purchasers obtain an organised body
for management of the property, while at the same time allowing
the promoter to complete the sale of the remaining flats in
accordance with law.
17. The proviso to Section 10 states that if the promoter fails to
apply for registration of the society within the prescribed period,
the purchasers themselves may approach the Competent Authority.
In such a situation the authority may direct the Registrar to
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register the society after verifying the authenticity of the applicants
and after giving the promoter an opportunity of being heard. The
Act therefore empowers the purchasers to initiate the process
themselves so that their collective organization is not indefinitely
postponed.
18. Sub-section (2) of Section 10 states that where the promoter
has already submitted the property to the provisions of the
Maharashtra Apartment Ownership Act by executing a declaration
under that Act, the promoter must inform the Registrar about it. In
such a case formation of a co operative society is not permissible
because the property would already be governed by the
condominium under the Apartment Ownership Act. This provision
shows that the law recognises two possible ways of ownership.
One is the condominium system under the Apartment Ownership
Act. The other is the co operative society under MOFA and the
Maharashtra Co operative Societies Act.
19. Section 11 of the Maharashtra Ownership Flats Act contains
perhaps the most important obligation imposed upon the
promoter. It requires the promoter to convey his right, title and
interest in the land and building to the organization of flat
purchasers. Once the society or association is formed, the promoter
must execute the conveyance and transfer ownership of the
property to that organization. If the agreement between the parties
does not specify any time limit for executing the conveyance, the
law requires that the conveyance must be executed within the
prescribed period.
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20. At the initial stage the promoter owns the land and develops
the building. He sells individual flats to different purchasers.
However, once the flats are sold and the society is formed, the
property should ultimately belong to the collective body of
purchasers. The promoter cannot continue to remain the owner
indefinitely after selling the flats. Execution of conveyance ensures
that the society becomes the lawful owner of the land and building
and is able to manage the property for the benefit of all its
members.
21. Sub-section (2) of Section 11 further requires the promoter
to file a copy of the conveyance with the Competent Authority
within the prescribed time. Sub section (3) provides a remedy for
the flat purchasers where the promoter fails to execute the
conveyance within the required period. In such circumstances the
society or association of apartment owners may apply to the
Competent Authority seeking a certificate for unilateral deemed
conveyance. The application must include copies of the
agreements for sale entered into with the promoter and other
relevant documents such as the occupation certificate.
22. Sub-section (4) explains the procedure to be followed by the
Competent Authority. After receiving the application the authority
must conduct an inquiry. It must verify the authenticity of the
documents submitted and must give the promoter a reasonable
opportunity of being heard. If the authority finds that the case is fit
for grant of deemed conveyance, it may issue a certificate to the
Sub Registrar stating that the promoter's right, title and interest in
the property may be transferred in favour of the society.
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23. Sub-section (5) describes the final stage of the process. Once
the society presents the certificate along with the unilateral
conveyance deed before the Sub Registrar, the registering authority
must issue notice to the promoter and allow him to show cause. If
the authority is satisfied that the circumstances justify such action,
it may register the instrument as a deemed conveyance even
without the promoter's consent.
24. These provisions clearly show the intention of the legislature.
The statutory scheme ensures that a promoter cannot indefinitely
retain ownership of the property after selling flats to individual
purchasers. The Act shifts the ownership of the property from the
promoter to the collective body of flat purchasers. When these
statutory provisions are considered in the context of the present
case, it becomes evident that the rights of the promoter must be
examined within this legal scheme. The promoter cannot rely
solely upon contractual clauses if those clauses operate in a
manner that defeats the statutory rights of the flat purchasers. The
combined effect of Section 14 of the Maharashtra Apartment
Ownership Act and Sections 10 and 11 of the Maharashtra
Ownership Flats Act is that the ultimate ownership of the property
must rest with the apartment owners or with the cooperative
society formed by them.
25. Therefore, any interpretation of the contract in the present
matter must be consistent with these statutory provisions. The Act
does not permit a situation where the flat purchasers carry the
responsibilities of ownership while the promoter continues to its
development potential for an unlimited period without informed
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consent.
26. While examining the present controversy, it is also necessary
to consider the principles laid down by the Supreme Court in the
case of Jayantilal Investments v. Madhuvihar Co-operative Housing
Society, (2007) 9 SCC 220. The judgment explains how the
provisions of the Maharashtra Ownership Flats Act must be
understood in situations where a promoter undertakes
construction in accordance with a sanctioned layout plan but
disputes arise regarding additional construction or disclosure of
the project. The promoter is required to place before the
purchasers the entire project at the very beginning. If the layout
plan contemplates several buildings or wings, that fact must be
clearly disclosed to the flat purchasers at the time of entering into
the agreement. Once such disclosure is made and the construction
proceeds according to the approved layout plan, the promoter may
carry out further construction without again seeking consent from
the purchasers.
27. From the material placed before the Court it appears that in
the present case the promoter did not disclose the entire project
structure to the purchasers at the initial stage. The agreements for
sale and the documents placed on record do not clearly show that
the full scope of the development scheme was explained to the
purchasers when they agreed to purchase their flats. The
purchasers therefore entered into the transaction on the
understanding that the development was limited to what was
disclosed to them at that time. If additional development potential
or further phases of construction existed, the purchasers were
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entitled to be informed about it at the very beginning. Therefore,
in the present case the failure of the promoter to place before the
purchasers the entire project at the time of entering into the
agreements assumes importance.
28. The legal position on this aspect has also been explained in
recent decisions of this Court. In Harish Vijaysingh Bhatia v.
District Deputy Registrar, 2025 SCC OnLine Bom 1981 and Nusli
Neville Wadia V. Ijimima - Imitation Jewellery Market Co-operative
Society and Others 2026 SCC OnLine Bom 1520, this Court
observed that once flats are sold and the stage for conveyance
arrives, the promoter cannot continue to hold back portions of the
ownership rights of the property for himself. The statute requires
the promoter to convey his entire right, title, and interest in the
land and building to the organization of flat purchasers. If the
promoter is the owner of the land and building at the time when
conveyance is to be executed, he must transfer the entire interest
in that property. He cannot selectively convey certain rights and
retain the rest.
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29. The Sale Deed dated 13 April 2011 is examined in the light
of the statutory scheme governing transactions between promoters
and flat purchasers. When the clauses of that deed are read
carefully, it becomes apparent that certain restrictions were
inserted which attempted to reserve important rights in favour of
the petitioners even after the transfer of the property. These
restrictions relate to development potential, future use of FSI and
the manner in which the property could be redeveloped. In effect,
while transferring the property, the petitioners sought to retain
control over certain aspects of the land and its development. Such
reservations cannot be viewed in isolation. The
MaharashtraOwnership Flats Act, 1963 creates a structured
scheme which regulates the relationship between the promoter
and the flat purchasers. Under this scheme the promoter initially
develops the property and sells flats to individual purchasers.
However, once flats are sold and the organization of purchasers is
formed, the promoter is expected to convey his entire right, title
and interest in the land and building to that organization. The
statutory intention is that the purchasers, acting through their
society or association, should become the real owners of the
property and should be able to manage it without continued
control of the promoter. If the promoter while executing the
conveyance keeps back certain substantial rights relating to the
property, the purpose of the statute would be defeated. The flat
purchasers would bear the responsibilities of ownership such as
maintenance, taxes and management, yet important benefits
connected with the land would remain with the promoter.
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Therefore, any restriction or reservation which allows the
promoter to continue exercising significant rights over the property
after conveyance must be carefully scrutinized.
30. In the present case the restrictions contained in the Sale
Deed appear to reserve development advantages in favour of the
petitioners. Such reservations are inconsistent with the statutory
scheme which requires the promoter to transfer the property in a
complete and effective manner. The conveyance must also be
consistent with the sanctioned development plans and the legal
framework under which the project was approved. If the
conveyance attempts to carve out private rights that operate
contrary to the planning approvals or the statutory rights of the
flat purchasers, such reservations cannot be sustained.
31. Viewed from this perspective, the Competent Authority was
justified in examining the nature of these restrictions and in
concluding that the petitioners had not conveyed the property in
the manner contemplated by law. When the statutory obligation to
transfer title remains unfulfilled, the law provides the remedy of
deemed conveyance so that the society of purchasers is not
deprived of ownership merely because the promoter retains certain
rights.
32. Therefore, the order granting deemed conveyance cannot be
said to be arbitrary or without basis. On the contrary, it appears to
be consistent with the statutory objective of ensuring that the
property ultimately vests in the society of flat purchasers without
encumbrances created by the promoter. The restrictions inserted in
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the Sale Deed dated 13 April 2011 were inconsistent with the
scheme of the Maharashtra Ownership Flats Act and could not
defeat the statutory rights of the purchasers.
33. For these reasons, the decision of the authority granting
deemed conveyance appears justified in the circumstances of the
case. The writ petition, which seeks to challenge that order,
therefore does not merit interference. The writ petition is liable to
be dismissed.
34. In view of the discussion and reasons recorded in the
foregoing paragraphs, the following order is passed.
35. The writ petition stands dismissed.
36. Rule stands discharged.
37. There shall be no order as to costs.
38. At this stage, learned Advocate for the petitioners prayed for
continuation of the ad-interim relief. However, for the reasons
recorded in the present judgment, the prayer continuation of the
ad-interim relief is rejected.
(AMIT BORKAR, J.)
