2023:BHC-OS:4659-DB 902-OSWPL-23026-2021+.

DOC

Gaikwad RD

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 23026 Of 2021
WITH
INTERIM APPLICATION (L) NO. 1676 OF 2022
IN
WRIT PETITION (L) NO. 23026 OF 2021

Hasmukh Narrotamdas Malkan …Petitioner

Versus
The District Deputy Registrar Co-operative
Societies, Mumbai City-3 & Anr …Respondents

Mr Janak Dwarkadas, Senior Advocate, with Mayur

Khandeparkar, RA Shah, Aditya Sarangarajan& Kanak
Kadam, i/b Mansukhlal Hiralal & Co, for the Petitioner.
Smt PH Kantharia, GP, for Respondent No.1-State.
Mr Sanjay Jain, with Rajesh Sharma, Ankit Lohia, Jugal Haria &
Tejashree Parab and Swapnil S, i/b Rajesh S. Sharma &
Associates, for Respondent No. 2.

CORAM G.S. Patel &

Neela Gokhale, JJ.
DATED: 8th June 2023
PC:-

1. The present order will dispose of the Writ Petition on the

limited ground canvassed before us. There is a pending proceeding

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before the 1st Respondent, the District Deputy Registrar of Co-

operative Societies, Mumbai City-3. Before him, as between the
Petitioner, the proprietor of Vimal Builders, and the 2nd
Respondent Society there are various other points of contestation in
regard to the Society’s demand for what is called a ‘Deemed
Conveyance’ under Section 11(3) of the Maharashtra Ownership
Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act, 1963 (“MOFA”).

2. The facts are not many, but before we turn to those, a very
quick analysis of the relevant provisions of MOFA may be
necessary. The Act itself was intended to address what is described
as a shortage of housing, “sundry abuses”, malpractices and
difficulties relating to the construction sale management and
transfer of ownership flats in the State of Maharashtra. Many
sections of this Act were the subject of extensive litigation including
Sections 7 and 7A but these are not relevant for our purposes today.
Very broadly stated, the Act contemplates two stake-holders. The
first is the promoter and a definition is provided in Section 2(c).
This is an expansive definition and there is no controversy before us
that the Petitioner fits that definition, although the Society contends
that the Petitioner is not the only promoter. Then there are
definitions of ‘flat’, ‘apartment’, ‘apartment owner’ and what is
meant by the expression ‘to construct a block or building or flats’.
Section 3 sets out the general liabilities of a Promoter. These extend
to making a disclosure, giving inspection, identifying the nature of
the fixtures and so forth. There are statutory requirements such as
that a Promoter must enter into an agreement before accepting
advance payment and such agreements are to be registered. That is

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provided in Section 4. The effect of non-registration is separately

provided by the amended Section 4A. Section 5 demands that the
Promoter maintains separate account of the advances. Section 6
passes the responsibility on the Promoter to pay outgoings until the
property is transferred.

3. Section 7 has been the subject of a great deal of litigation in

this Court and deals with the disclosures to be made by the
Promoter and any alternations or additions to plans without consent.
We will pass over those sections today.

4. Sections 10 and 11 are both important for our purposes and

we will set these out now in full:
“10. Promoter to take steps for formation of a
cooperative 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
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, the

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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, 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, 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 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

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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 Registration Officer under the Registration
Act, 1908, certifying that it is a fit case for enforcing
unilateral execution, of conveyance deed conveying the

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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, 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, 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’.”
(Emphasis added)

5. The 2nd Respondent is a co-operative society. It filed a suit

seeking specific performance of an agreement with the Petitioner.
This suit was originally filed in this Court as Suit No. 4231 of 1993
and was then transferred to the City Civil Court on a change of
pecuniary jurisdiction and renumbered there as SC Suit No. 1358 of
2014. The background to this is that the Petitioner acquired a
certain tract of land of about 4100 sq. mtrs. out of a much larger
plot. The land is at Vile Parle (East). Vimal Builders traces its title to
early 1973. According to the Petitioner, and this may be a further
area of controversy, there was a layout proposed for the
development of the plot. Between the Petitioner and his vendors
there came to be filed a suit for specific performance in this Court

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which resulted in a decree in favour of the Petitioner and a resultant

conveyance of 13th June 2007. That conveyance was executed by
the Prothonotary and Senior Master of this Court under orders of
this Court.

6. The 2nd Respondent Society was registered on 30th October

1982. It seems that the Petitioner began construction on the plot.
The 2nd Respondent claims rights to the entire plot and all
structures constructed on it. This would include the utilization of
any balance unutilized FSI but that is another area of controversy
which we do not think it necessary to address today.

7. It seems that for reasons that are now not material, on 12th
March 2020 the 2nd Respondent Society applied to the City Civil
Court at Dindoshi for leave to withdraw the City Civil Court Suit
“with liberty to file a fresh Suit on the same cause of action if
necessary”. Clearly, the application was under Order 23 of the Code
of Civil Procedure, 1908. The application appears to have been
opposed at least to the extent of the liberty sought by the Petitioner
filing an Affidavit in Reply. Ultimately, after a short reasoned order,
the 1st Additional Principal Judge of the City Civil & Sessions Court
passed an order on 12th January 2021 imposing costs of Rs.
10,000/- on the Society, and then permitting the withdrawal with
liberty to file a fresh suit on the same cause of action. Just about a
month thereafter on 25th February 2021 the Society filed an
application before the 1st Respondent under Section 11(3) of the
MOFA seeking a deemed conveyance.

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8. The Petitioner filed Writ Petition (Stamp) No. 1864 of 2021

in this Court challenging the 12th January 2021 order to the extent
that it reserved the liberty to the Society to file a fresh suit. The
matter came up before a learned Single Judge of this Court on 16th
March 2021. The Society was the 1st respondent to that Writ
Petition and it was represented. Counsel for the Society made a
statement on instructions that the Society did not want to “file a
fresh suit” and stated that liberty may be granted instead to
withdraw the City Civil Court suit unconditionally. That application
was allowed and the original plaintiff, namely the Society was
permitted to withdraw the suit unconditionally.

9. Now the Petitioner Vimal Builders comes back to Court this

time with a challenge to the Section 11(3) deemed conveyance
application seeking amongst other things a writ of prohibition
against the 1st Respondent Society from proceeding with that
application. As we noted there may be between the parties very
many contentious areas. In a Writ Petition, we will obviously not
enter into any disputes relating to facts. But when the matter was
listed a few days ago, Mr Dwarkadas submitted that there was an
important jurisdictional issue, namely, that having once now
unconditionally withdrawn the City Civil Court Suit, whether the
Society could sustain an application under Section 11(3) of the
MOFA for a deemed conveyance. We made it clear on that day that
we would only hear the objection or question on jurisdiction and
would not address ourselves to the other areas that are to be decided
by the 1st Respondent. We did so because we believe that the
jurisdictional issue would not only go to the root of the matter but

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was probably more efficiently decided here than there. With this
clarification, we listed the matter today for final disposal at 2:30 pm.

10. We have heard Mr Dwarkadas on these facts and on this

limited question, the only question that we are required to address.
His submission is that having once filed a suit for specific
performance demanding a conveyance under Section 11(1) of the
MOFA, and having, at the end of the day, effectively unconditionally
withdrawn that suit, the entire relief cannot be allowed to be
revisited by filing an application under Section 11(3) of the MOFA.
His case is one of abandonment of the relief that was sought to be
pursued in the suit. Once the relief is abandoned, Mr. Dwarkadas
submits, it is abandoned for all purposes and it cannot be revived or
brought back to life by invoking some other section of the statute.
The right to seek specific performance flowing from sub-section (1)
and the right to demand a deemed conveyance under sub-section (3)
are both housed in Section 11 of the MOFA. According to Mr
Dwarkadas, Section 11 of the MOFA exhausts the universe of
obligations of the promoter to convey title and execute documents
according to the agreement. Once a relief is sought and abandoned
under any part of Section 11 of the MOFA, it cannot be sought
afresh under some other sub-section.

11. Ex-facie we find it difficult to appreciate this argument. It

cannot be seen in the abstract. The withdrawal of the Suit was
initially sought with a very specific liberty i.e. to institute a fresh
suit, if necessary. That was the liberty that was reserved to the
Society namely to institute a fresh suit. The Society has not in fact

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filed any fresh suit. It told a Single Judge of this Court it did not
intend to so. It is not as if the Society has, despite the statement to a
learned Single Judge of this Court, proceeded to file a suit. What the
Society has done is to simply invoke a right that is available to it
under the MOFA itself, i.e., a statutory remedy. We do not think
that it is possible, simply because sub-sections (1) and (3) seek of the
same nature of the obligation, to confuse or conflate one with the
other. As a reading of the extracted sections show, sub-section (1)
casts an obligation on the promoter to complete his title and to
convey to, in this case the Society, the entirety of the promoter’s
right, title and interest in the land and building. Sub-section (3)
begins to operate on a default by the promoter under Sub-section
(1). This is logical. If it were otherwise, it would mean that every
promoter could simply fail to execute a conveyance and other than
filing suits for specific performance there was not a thing any society
or association of flat owners could do. That would clearly defeat the
entire object and purpose of the Act and might in fact be part of
what is described in the Statement of Objects and Reasons as one of
the “sundry abuses” or malpractices, i.e., the very mischief sought
to be addressed by the Act. This is the rationale behind sub-section
(3). It deals with precisely this situation namely the failure of a
promoter to execute a conveyance as required by Section 11 (1) of
the MOFA. On that default, the Society has the right to apply to a
Registrar for an order compelling a conveyance.

12. Further, this statutory right is fully in consonance with the

statutory intent. A promoter receives advances from prospective flat
purchases. He then begins construction. Further amounts are paid.
The statute allows the flat purchasers to come together to form a

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society (and, notably, Section 10, as amended, allow the formation

of the society). Once that is done, the promoter must transfer title to
the society. For this is nothing but a coming together of the
promoter’s contractual purchasers. The statute does not
contemplate a promoter taking money, constructing, and then
holding on to the title indefinitely for whatever reason or purpose.
Therefore the obligation in Section 11(1), and the corresponding
right on default in Section 11(3).

13. Indeed, in the history of the matter, there is a very interesting

parallel. The Petitioner himself had filed a suit for specific
performance in this court seeking title from his vendor. That title
was ultimately conveyed to the Petitioner by a document executed
by an officer of this Court under orders of the Court. The parallel
between how the Petitioner acquired title and how the Society
proposes to acquire title is obvious and gives us all the answer that
we need.

14. On the jurisdictional point we find no substance in the

argument of the Petitioner. We clarify that we have not addressed
any of the other contentions on merits, nor have we identified fully
what those other contentions may be. Those are left open for being
considered by the 1st Respondent. It goes without saying that we
require the 1st Respondent to hear both sides fully. Neither side is to
seek needless adjournments. The 1st Respondent should dispose of
the application at the earliest possible, preferably within eight weeks
from today.

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15. Mr Dwarkadas states that an additional Affidavit in Reply

before the 1st Respondent will be filed and served by 30th June
2023. A response by the Society is permitted by 10th July 2023.

16. The Writ Petition is disposed of in the above terms.

17. In view of disposal of the disposal of Writ Petition, the

Interim Application (Lodging) No. 1676 of 2022 also stands
disposed of.

18. No costs.

(Neela Gokhale, J) (G. S. Patel, J)

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