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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.M. Modak, J.
Rusabh Shah - Petitioner
Versus
Avarsekar & Sons Private Limited - Respondents
Writ Petition No.6258 Of 2019
Decided On : 23-12-2022
Fact of the Case:
The dispute arose between a proposed society and a developer regarding the formation of a new entity. The petitioner argued for a cooperative housing society, while the respondent claimed that the property was already submitted under the MAO Act 1970. The Competent Authority rejected the proposal for registration of the society, leading to this writ petition.Finding of the Court:
The Competent Authority had not properly considered the provisions of the Acts and the validity of the 'deed of Declaration'. The court held that the petitioner had made a case for registration of the housing society and directed the Competent Authority to issue a certificate of registration to the petitioner.Ratio Decidendi:
The court emphasized the importance of properly interpreting the provisions of the Acts and ensuring that the 'deed of Declaration' is in compliance with the MAO Act 1970. The Competent Authority has a responsibility to verify the validity of the 'deed of Declaration' and cannot mechanically reject the proposal for registration. Final Decision: The court allowed the petition and directed the Competent Authority to issue a certificate of registration to the petitioner within one month.The ratio on the registration of a condominium, as derived from the provided document, emphasizes that the submission of property to the provisions of the relevant Act (such as the Maharashtra Apartment Ownership Act) must be done strictly in accordance with the statutory requirements. The key points are:
The submission of property to the provisions of the Act is a unilateral act that can only be performed by the promoter, and not by the landowner or other parties unilaterally, unless there is a clear relationship established through proper agreements and compliance with the statutory provisions (!) (!) (!) (!) (!) (!) .
The 'deed of Declaration' must be executed and registered as per the provisions of the relevant Act, and it must contain all necessary particulars as prescribed under the law. Any deviation or non-compliance can render the submission invalid (!) (!) (!) .
The competent authority's role is primarily to verify whether the 'deed of Declaration' is made in accordance with the provisions of the Act and whether the property is submitted properly. The authority cannot mechanically reject or approve without proper verification, and it must ensure that the submission is lawful and compliant before proceeding with registration (!) (!) (!) .
The authority is also responsible for ensuring that the information about the submission has been given to the correct designated authority, typically the Registrar or an officer authorized under the law. Giving information to an officer below the designated authority or not following the prescribed procedures can invalidate the registration process (!) (!) (!) .
The intention of the parties, the compliance of the 'deed of Declaration' with statutory provisions, and the proper procedural adherence are crucial factors in the registration process. Any irregularities or disputes regarding the validity of the 'deed of Declaration' or the submission process can impact the registration of a condominium (!) (!) (!) (!) (!) (!) .
In essence, the registration of a condominium requires strict adherence to statutory procedures, proper execution and registration of the 'deed of Declaration,' and verification by the competent authority to ensure compliance with the law. The authority's role is to confirm that the submission is lawful, complete, and in accordance with the provisions of the relevant Acts, and not to mechanically reject or approve without due verification.
JUDGMENT :
1. There was a dispute in between proposed society headed by the Petitioner as Chief Promoter on one hand and the Developer/Promoter – Respondent No.1 on the point of formation of new entity. According to Petitioner, it should be co-operative housing society, whereas, according to Respondent No.1, already the declaration is submitted as per the provisions of the Maharashtra Apartment Ownership Act, 1970 (Maharashtra Act No.XV of 1971) [ “MAO Act 1970”]. There is one more facet to this dispute. The ‘Declaration’ as contemplated under the provisions of Section 2 of MAO Act 1970 was registered but not by Respondent No.1 but by one Mr.M.V.Prajith.
2. This dispute first arose before the ‘Competent Authority’ constituted under Section 5A of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (Act No. XLV of 1963) [“MOFA, 1963”]. This was when the proposal moved by the Petitioner for registration of cooperative housing society was under consideration and the Respondent No.1 took objection under the provision of Section 10(2) of the MOFA Act, 1963. Ultimately, the Competent Authority rejected the proposal vide order dated 30 th June, 2018. It is challenged by way of this Writ Petition.
3. Heard learned Advocate Mr.Sharan Jagtiani, for the Petitioner, learned Advocate Mr.Sanjiv Punalekar for Respondent No.1 and learned AGP Mr. S.D.Rayrikar for the Respondent No.2 - State.
4. Rule. Rule made returnable forthwith. Learned counsel for the Respondent waives service. By consent of the parties matter is heard finally.
5. Petitioners relied upon contingency of formation of society on non-cooperation basis as per the provisions of first proviso to Section 10(1) of MOFA, 1963. Whereas, the Respondent No.1 relies upon the provisions of Section 10(2) of the said Act. So, the issue is :
6. Both the learned Advocates elaborated various facets of the provisions of the MOFA, 1963, MAO Act 1970 and the Maharashtra Co-operative Societies Act, 1960 (Maharashtra Act No.XXIV of 1961) [MCS Act, 1960] and Rules made thereunder.
7. There is conflict in between rights of prospective purchaser to form co-operative housing society on one hand and right of Respondent No.1 to submit the property to the provisions of MAO Act 1970. So, we have to decide :
(a) Which right prevails,
(b) What is the scope of inquiry by Competent Authority ;
(c) Whether he can ascertain the validity of ‘deed of Declaration’ .
8. According to the Petitioner, the alleged ‘deed of Declaration’ is not as per the provisions of the MAO Act 1970 and intimation about registration of deed of declaration was not given to the proper Authority. Whereas, learned Advocate for Respondent No.1 brought to my notice various amendments made in the provisions of MAO Act 1970. It will be relevant to go through the provisions of relevant Acts.
Provisions of the Act
9. There can be formation of three entities consisting of flat purchasers of the building. They are :-
(a) Co-operative Housing Society
(b) Company
(c) Condominium
10. In the present Petition, we are not concerned with the entity ‘company’. The MOFA, 1963, lays down what are the responsibilities of promoter and flat purchasers. Promoter includes owner of the land as well as builder who constructs the building and sells the flat. Upto the stage of formation of entity, there is no difference in between legal relation of promoters vis-a-vis flat purchasers. Once the stage of formation of entity has arrived, legal relation in between them depends upon type of entity to be formulated.
11. If it is a co-operative housing society, then legal relationship will be governed by the provisions of Sections 10 and 11 of MOFA, 1963. Whereas, if the condominium is to be formed then the provisions of Section
The Competent Authority must properly consider the provisions of the Acts and the validity of the 'deed of Declaration' when deciding on the registration of a housing society.
Promoters must disclose the precise nature of the organization (cooperative society or otherwise) in agreements, and unilateral declarations that lack collective consent do not comply with statutory ....
The court emphasized that registration of a Cooperative Housing Society without following proper jurisdictional authority and principles of natural justice is void ab initio.
The Competent Authority's failure to ensure service of notice and adherence to natural justice principles invalidates the ex parte decision regarding Unilateral Deemed Conveyance.
The pendency of a title suit cannot impede the issuance of a deemed conveyance under Section 11 of MOFA or justify the deregistration of a cooperative society under Section 21A of the MCS Act.
The court affirmed that a promoter must be included as a member for cooperative society registration under the MOFA Act, ensuring compliance with statutory requirements.
The absence of an occupation certificate does not prevent a Co-operative Housing Society from obtaining deemed conveyance, as the promoter's failure cannot disadvantage flat purchasers.
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