Bombay High Court: Competent Authority Erred in Allowing Third Deemed Conveyance Plea Barred by Res Judicata

Mumbai, Maharashtra – The Bombay High Court, in a significant ruling, has set aside an order by the District Deputy Registrar (Competent Authority) that granted deemed conveyance to a housing society, holding that the society's third application was barred by the principle of res judicata . Justice Sandeep V. Marne emphasized that a quasi-judicial authority cannot entertain successive applications for the same relief when a previous application has been rejected and that rejection has attained finality, particularly without liberty to file anew.

The Court, however, granted liberty to the housing society, Torna Co-operative Housing Society Ltd. ( Torna CHS ), to challenge the earlier order dated 5 August 2021, which had rejected its second application for deemed conveyance.

Case Overview

The case involved two writ petitions challenging the Competent Authority's order dated 14 November 2024, which had granted a certificate of deemed conveyance for land admeasuring 2120.25 sq.mtrs. to Torna CHS . Writ Petition No. 19417 of 2024 was filed by M/s. Aakansha Construction Company (Akanksha), the original promoter, and Writ Petition (St.) No. 38 of 2025 was filed by M/s. Nutan Realtors, who claimed ownership of the land.

Torna CHS had previously filed two applications for deemed conveyance:

1. Application No. 144/2019: Rejected on 13 January 2020, due to pending litigation and non-joinder of landowners, but with liberty to file a fresh application.

2. Application No. 141/2020: Rejected on 5 August 2021, citing unclear title due to pending suits and incomplete development, without granting liberty to file a fresh application.

Subsequently, Torna CHS filed a third application (No. 193/2024), which was allowed by the Competent Authority on 14 November 2024, leading to the present writ petitions.

Arguments Presented

Petitioners (Akanksha and Nutan Realtors): * Argued that the third application was barred by res judicata as the second rejection order (5 August 2021) had attained finality and no liberty was granted to file a fresh application. They relied heavily on the Supreme Court's judgment in M/s. Faime Makers Private Ltd Vs. District Deputy Registrar Co-op Societies . * Contended that the Competent Authority erred in conveying the entire 2120.25 sq.mtrs., claiming the society was entitled to a smaller area based on original sanctioned plans and FSI calculations.

Respondent ( Torna CHS ): * Submitted that the application was not barred by res judicata as the earlier rejections were not on merits. * Argued that a subsequent High Court ruling in New Manoday Co-Op Housing Society Ltd Vs. Uday Madhavrao Jagtap clarified that pendency of suits between promoters and landowners cannot bar deemed conveyance, constituting a change in law or interpretation, thus allowing a fresh application (citing Hope Plantations Ltd. Vs. Taluk Land Owner Board ). * Stated they were entitled to the entire land area of Final Plot No. 696.

Court's Reasoning and Application of Legal Principles

Justice Sandeep V. Marne , after considering the rival contentions, found merit in the petitioners' arguments regarding res judicata .

On Res Judicata: The Court observed that the Competent Authority, in its order dated 5 August 2021, had rejected Torna CHS 's second application, and no liberty was granted to file a fresh application. This order had attained finality.

The Court cited the Supreme Court in M/s. Faime Makers Private Ltd. : > "Once the said order has been accepted by the parties and has attained finality, the Competent Authority would not have jurisdiction to entertain a second application contrary to the findings and directions given by the Competent Authority in the first order." > > "...principles of res judicata equally apply to quasi-judicial bodies. Whenever a judicial or quasi-judicial tribunal gives a finding on law or fact, its findings cannot be impeached collaterally or in a second round and are binding until reversed in appeal or revision or by way of writ proceedings."

The High Court found the Faime Makers judgment "squarely applicable," stating: > "If Torna CHS believed that the second rejection order of the Competent Authority passed on 5 August 2021 was erroneous, the same ought to have been challenged before higher forum and mere error of Competent Authority in refusing to decide application for deemed conveyance on account of pendency of suit could not have been a reason for entertaining fresh application for deemed conveyance." (Para 31)

On Change in Law Argument: The Court rejected Torna CHS 's argument that the New Manoday CHS judgment constituted a change in law that would negate res judicata . > "In my view the judgment in New Manoday CHSL merely reiterates or restates the law which was already expounded by this Court earlier. The judgment in New Manoday CHS cannot be construed to mean as if the law has been interpreted differently by a higher forum for applying the exception recognised by the Hon’ble Apex Court in Hope Plantations Ltd." (Para 34)

Competent Authority Cannot Correct Its Own Error: The Court emphasized that even if the second rejection order was erroneous, the Competent Authority could not rectify its own mistake by entertaining a fresh application. > "The issue is whether the Competent Authority itself can correct its own error committed in order dated 5 August 2021? The answer to the question would be emphatically in the negative. It is the only higher forum which would be in a position to correct the error committed by the Competent Authority in the order dated 5 August 2021. As held by the Hon’ble Apex Court in Ujjam Bai and M/s. Faime Makers Pvt. Ltd. the characteristic attribute of a judicial or quasi judicial order is that it binds, whether right or wrong." (Para 37)

Jurisdictional Error: While acknowledging the beneficial nature of MOFA as highlighted in Arunkumar H. Shah HUF , the Court found that the objection of res judicata went to the root of the Competent Authority's jurisdiction. > "If there a jurisdictional error in passing the order of deemed conveyance, the order would suffer from manifest error of law and would be susceptible to challenge in writ jurisdiction of this Court... In my view therefore the impugned order passed by the Competent Authority suffers from serious jurisdictional error and cannot be sustained." (Para 39)

The Court expressed its reluctance in setting aside an order granting deemed conveyance but found the jurisdictional error compelling: > "Attempt to correct its own error by entertaining fresh application for deemed conveyance is a serious jurisdictional error, which leaves no option for this Court but to set aside the impugned order, particularly on account of recent decision of the Hon’ble Apex Court in a similar case in Faime Makers Pvt. Ltd." (Para 40)

Final Decision and Implications

The Bombay High Court allowed the writ petitions and passed the following order: 1. The order dated 14 November 2024, passed by the Competent Authority in Application No.193/2024 (granting deemed conveyance to Torna CHS ), was set aside. 2. Torna CHS was granted liberty to challenge the order dated 5 August 2021 (which rejected its second application) on its own merits. All rights and contentions of parties on merits were expressly left open.

This judgment underscores the importance of the principle of res judicata even in proceedings before quasi-judicial authorities under beneficial legislations like MOFA. It clarifies that while such authorities aim to provide speedy remedies, they must operate within the established bounds of legal procedure, and their decisions, once final, cannot be re-opened by filing fresh applications for the same relief without explicit liberty or fundamentally altered circumstances as recognized by law. Aggrieved parties must pursue remedies against erroneous orders through appeals or challenges in higher forums.