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IN THE HIGH COURT OF BOMBAY
R.M. Savant, J.
Farhat Co-op. Housing Society Ltd. - Appellants
Vs.
Malkani Enterprises - Respondent
AND
Hasham Esa Dathawala - Appellants
Vs.
Farhat Co-op. Housing Society Ltd. - Respondent
Writ Petition Nos. 9116 and 10356 of 2013
Decided On: 23.09.2014
MOFA - DEEMED CONVEYANCE - OWNERSHIP OF FLATS ACT - SECTION 11(3) - APPLICATION FOR DEEMED CONVEYANCE - COMPETENT AUTHORITY - ORDER SUBJECT TO FINAL DECISION IN SUIT - CHALLENGE - COLLUSIVE SUIT - INCOMPLETE APPLICATION - RIGHTS OF PROMOTER/DEVELOPER - ASSIGNMENT OF LEASE - CONSTRUCTION OF AGREEMENT - INTERPRETATION OF PROMOTER - SECTION 2(C) - OWNERS CAUSING CONSTRUCTION - OBLIGATION TO CONVEY PROPERTY - ORDER QUASHED - DEEMED CONVEYANCE WITHOUT CONDITIONS.
Fact of the Case:
Petitioners in Writ Petition No. 9116 of 2013, a Co-operative Housing Society, filed an application for deemed conveyance under Section 11(3) of the Maharashtra Ownership of Flats (Regulation of the Promotions of Construction, Sale, Management and Transfer) Act, 1963 (MOFA). The Competent Authority allowed the application, but made the deemed conveyance subject to the final decision in a Suit filed by the Respondent Nos. 3 to 11, the owners of the land, against the Respondent No. 1, the Developer, for possession of the plot of land. The Petitioners in Writ Petition No. 10356 of 2013, the owners, challenged the order, arguing that the application was incomplete and that the Society was only entitled to the monthly tenancy of the Developer.
Finding of the Court:
The Court held that the application was complete and that the Society was entitled to the assignment of the lease, to which the Developer would be entitled to from the owners. The Court found that the Suit filed by the owners against the Developer was collusive and was filed with the sole objective of frustrating the application for deemed conveyance filed by the Society. The Court also held that the owners, as the Promoters, had an obligation to convey the property to the Society and that the Competent Authority had rightly intervened in the matter by passing the impugned order.
Issues: 1. Whether the application for deemed conveyance was incomplete? 2. Whether the Society was entitled to the assignment of the lease or only to the monthly tenancy of the Developer? 3. Whether the Suit filed by the owners against the Developer was collusive? 4. Whether the owners, as the Promoters, had an obligation to convey the property to the Society?
Ratio Decidendi: 1. The Court held that the application was complete, as it contained the necessary documents and complied with the requirements of the Rules framed under the MOFA. 2. The Court held that the Society was entitled to the assignment of the lease, as the Developer had an Agreement to Lease from the owners and the flat purchasers' agreement provided that the Society would be entitled to the lease. 3. The Court found that the Suit filed by the owners against the Developer was collusive, as it was filed without disclosing the fact that a building had already been constructed and that the Society had filed an application for deemed conveyance. The Court also noted that the owners and the Developer were represented by the same lawyer and that an order of injunction had been obtained against the Developer, which had virtually no rights remaining in the property. 4. The Court held that the owners, as the Promoters, had an obligation to convey the property to the Society, as they had caused the construction of the building and had entered into agreements with the flat purchasers to sell the flats on ownership basis.
Final Decision: The Court quashed and set aside the order of the Competent Authority insofar as it made the grant of deemed conveyance subject to the final decision of the Suit. The Court held that the Society was entitled to deemed conveyance without any conditions. The Court also dismissed the Petition filed by the owners.
R.M. Savant, J.
1. Rule, in both the Petitions, with the consent of the learned Counsel appearing for the parties, made returnable forthwith and heard.
2. The above Writ Petitions, which are cross Writ Petitions, filed under Articles 226 and 227 of the Constitution of India, take exception to the order dated 6th May, 2013 passed by the Competent Authority and District Deputy Registrar, Co-operative Societies (3), Mumbai, by which order, the application filed by the Petitioner in Writ Petition No. 9116 of 2013 for deemed conveyance under Section 11(3) of the Maharashtra Ownership of Flats (Regulation of the Promotions of Construction, Sale, Management and Transfer) Act, 1963 (hereinafter referred to as "the MOFA"), came to be allowed and resultantly, the unilateral deemed conveyance/assignment of right, title and interest of the developers in respect of the land being Plot No. B CTS No. 68/B, Mauje Bandivali, Taluka Andheri, Mumbai Suburban District, admeasuring 3380.50 square meters, came to be granted, however the said deemed conveyance was made subject to the final decision in T. E. & R. Suit No. 4/4 of 2013 filed by the Respondent Nos. 3 to 11 in the said Writ Petition No. 9116 of 2013 against the Respondent No. 1.
3. Insofar as the Petitioner in Writ Petition No. 9116 of 2013 is concerned, it is challenging the said order to the extent of it being made conditional to the final decision in the said T. E. & R. Suit No. 4/4 of 2013. Insofar as the Petitioners in Writ Petition No. 10356 of 2013 are concerned, they are challenging the said order insofar as it grants deemed conveyance to the Petitioner in Writ Petition No. 9116 of 2013. The Petitioner in Writ Petition No. 9116 of 2013 would be hereinafter referred to as the "Society" and the Petitioners in Writ Petition No. 10356 of 2013 would be referred to as the "owners" and the Respondent No. 12 would be referred to as the "Competent Authority" for brevities sake.
4. The factual matrix involved in both the Petitions is common and can be stated thus:
The Petitioner in Writ Petition No. 9116 of 2013 is a Co-operative Housing Society formed by the flat purchasers of the building constructed by the Respondent No. 1 herein i.e. M/s. Malkani Enterprises. The said building consist of two wings having 60 residential flats. All the flat purchasers are the members of the Petitioner Society.
5. At this stage, it would be necessary to refer to certain antecedent facts prior to the construction of the building by the respondent No. 1 herein. Insofar as the plot of land, on which the building is situated is concerned, the said plot of land is amongst one of the lands which were leased out by M/s. Byramjee Jeejibhoy Pvt. Ltd. by a registered lease dated 8th May, 1953 to one Haji Esmail Aziz Dathawala, whose estate came to be popularly known as the Dathawala Estate (it appears that Dathawala was also known and recognized by the surname 'Malkani'). It appears that between M/s. Byramjee Jeejibhoy Pvt. Ltd. and the said Haji Esmail Aziz Dathawala, there was an agreement and memorandum of understanding, whereby, it was agreed that Haji Esmail Aziz Dathawala would purchase some portion of the lands, which were leased out to him and in consideration was to surrender some portion of the lands. The said Haji Esmail Aziz Dathawala expired sometime around 1961-62 leaving behind his wife Khatijabai, sons and daughters, who are the Respondent Nos. 3 to 11 in the Petition i.e. the "owners". It appears that in pursuance of the said understanding between the said M/s. Byramjee Jeejibhoy Pvt. Ltd. and Haji Esmail Aziz Dathawala, after the death of the said Haji Esmail Aziz Dathawala, his widow Khatijabai and his sons and daughters i.e. the owners Respondent Nos. 3 to 11 herein executed a deed of conveyance dated 27th June, 1982 and purchased some portion, from lands which were numbered as old Survey Nos. 22-1 part, 23-3 part, 23-4 part and 24-1 part. It is out of the said old survey numbers that the plot
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