Beyond the FSI Dispute: Bombay HC Upholds Society’s Right to Deemed Conveyance

In a significant ruling for housing societies across Maharashtra, the Bombay High Court has clarified that the pendency of civil suits regarding floor space index (FSI) or construction irregularities does not create a blanket prohibition against granting "deemed conveyance." Justice Amit Borkar, presiding over a writ petition filed by the Quantum Park Co-operative Housing Society Limited , held that the Competent Authority under the MAHARASHTRA OWNERSHIP FLATS ACT (MOFA), 1963, has a statutory duty to facilitate land transfer, even if auxiliary disputes remain unresolved in civil courts.

The Backdrop of the Dispute

The conflict arose after the Quantum Park society, located in Bandra, Mumbai, sought a unilateral deemed conveyance of the land on which its buildings stand. The developer, AHCL-PEL, along with other associated respondents, had initially left the society in limbo regarding the formal transfer of land title.

When the society approached the Competent Authority under Section 11 of MOFA, their application was rejected on two main grounds: first, an alleged mismatch in the area sought compared to the recorded entitlement, and second, the pendency of several civil suits—including disputes over the legality of the 13th and 14th floors of the buildings.

Judicial Reasoning: A Narrow Scope for Authorities

The High Court dismantled the Competent Authority’s defensive approach, noting that statutory officials cannot adopt an "all-or-nothing" strategy when confronted with minor discrepancies in land records. Justice Borkar emphasized that the Authority is obligated to examine sub-parcels to grant conveyance, rather than denying the process entirely.

Furthermore, the Court addressed the "blanket ban" approach regarding civil litigation. It held that while disputes over FSI, floor legality, and planning regulations fall within the expertise of civil courts, they do not negate the fundamental identity of the land under the buildings. "The statute does not contemplate such an approach [where a suit stalls conveyance]," the Court observed, clarifying that the grant of deemed conveyance does not "validate unauthorized construction" but merely transfers the title subject to existing rights.

Key Observations from the Judgment

The following excerpts from Justice Borkar’s judgment underscore the Court's stance:

• "The Competent Authority must, if necessary, isolate sub-parcels to grant conveyance, rather than treat the parent number as a single block and reject the claim without analyzing its components."
• "The mere pendency of civil suits cannot operate as a blanket prohibition against exercise of statutory power under Section 11 of MOFA."
• "There is a clear distinction between a dispute about the identity or ownership of the land and a dispute about the manner in which construction was carried out on that land."
• "An order of deemed conveyance under Section 11 does not validate unauthorized construction. It does not certify that every floor has been lawfully built. It merely transfers the promoter’s right, title and interest in the land and building to the society."
• "The Authority was therefore in error in assuming that it lacked power to proceed under Section 11 merely because such suits are pending. The law does not impose such a restraint."

Implications for Housing Societies

The decision serves as a powerful precedent for housing societies struggling with promoters who leverage protracted litigation to delay the transfer of land title. By forcing the Competent Authority to focus on the identifiable land parcel and separating it from construction-related grievances, the Court has effectively streamlined the путь to ownership for flat purchasers.

The Court further clarified that any existing legal actions, such as Commercial Suit No. 178 of 2021, will continue independently, ensuring that developers remain accountable for structural deviations without holding the society's basic property rights hostage.

Ultimately, the judgment reinforces the legislative intent of the MOFA—ensuring that home buyers are protected from the indefinite hold of promoters—and demands that administrative authorities act decisively upon the record before them.