MOFA Prevails Over MRTP: Bombay High Court Upholds Deemed Conveyance, Reinforces Homebuyers' Rights - 2025-04-16

Bombay High Court: MOFA's Homebuyer Protection Mandate Overrides MRTP's Project Timelines in Landmark Deemed Conveyance Case

Pune, Maharashtra – In a significant judgment delivered on April 15, 2025, the Bombay High Court has reaffirmed the primacy of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ( MOFA ) over the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act) in matters of property conveyance to cooperative housing societies. Justice AmitBorkar , presiding over the Civil Appellate Jurisdiction, delivered a decisive verdict in Writ Petition No. 151 of 2019, settling a crucial legal question regarding the obligations of developers to transfer property titles to homebuyers.

Case Overview: Developer vs. Housing Society

The case was brought by developers Flagship Infrastructure Ltd., challenging an order of deemed conveyance issued in favor of Blue Ridge Unit “A” (Tower No.1 to 8) CHS Ltd., a cooperative housing society in Pune. The society, representing 811 flat owners in the Blue Ridge township project, sought deemed conveyance after the developers failed to transfer the title of the land and buildings despite repeated requests, years after the society's registration in 2011.

Flagship Infrastructure argued that a notification under Section 20(4) of the MRTP Act, granting them a ten-year period to complete the township project, superseded their obligation under MOFA to execute conveyance within four months of the society's formation. They contended that the integrated township project, sanctioned under MRTP, enjoyed special status and its timeline should prevail. The developers further argued that RERA , being a later legislation, limited conveyance to the building structure only and not the underlying land until the entire layout was complete.

Representing Blue Ridge Unit “A” CHS Ltd., Senior Advocate Mr. Anil Anturkar countered that MOFA is a special law designed specifically to protect homebuyers and its provisions regarding timely conveyance are paramount. He argued that RERA was inapplicable to agreements predating its enactment and that MOFA mandates conveyance of both land and building.

Court's Reasoning: MOFA as Special Law for Homebuyer Protection

The High Court unequivocally sided with the housing society, emphasizing MOFA 's purpose as a "law made for protecting ordinary people who buy flats." Justice Borkar underscored the legislative intent behind MOFA :

> “ MOFA was made to stop this kind of wrongdoing. The law puts several duties on the developer... to protect the interests of flat purchasers. One very important duty is given in Section 11 of MOFA . This section says that after selling the flats, the promoter must transfer the ownership rights that is, the title to the land and the building to the body formed by the flat purchasers.”

The court highlighted Rule 9 of the MOFA Rules, which mandates conveyance within four months of society registration, absent a specific agreement to the contrary. It rejected the developer's reliance on the MRTP notification, stating:

> “Even if the promoter has permission under the MRTP Act to take ten years to complete the entire township, that does not mean he can hold on to the ownership of flats or land for so many years and refuse to transfer ownership to the flat buyers who have already paid the full amount and moved into their homes.”

Applying the principle of generalia specialibus non derogant (special law overrides general law), the court firmly established MOFA 's precedence over the MRTP Act in matters of developer-homebuyer relations. The judgment cited previous rulings like Lok Housing & Construction Ltd. v. Lok Everest Co-op. Housing Society and Nahalchand Laloochand Pvt. Ltd. v. Panchali Co-op. Housing Society , reinforcing the strict timelines under MOFA and the promoter's obligation to transfer not only the building but also the land.

RERA Inapplicability and Rejection of Delay Tactics

The court dismissed the developer's arguments based on RERA , clarifying that MOFA , as a "local law," prevails under Section 17 of RERA . Justice Borkar stated that RERA 's provisions for conveyance only apply in the absence of a state-specific law like MOFA , which already comprehensively addresses conveyance timelines.

The court also rejected the developer's attempt to use clauses in sale agreements to delay conveyance, deeming such clauses void if they contravene the mandatory four-month period stipulated by Rule 9 of MOFA .

Final Verdict and Implications

The Bombay High Court partly allowed the writ petition, upholding the deemed conveyance order issued by the District Deputy Registrar in favor of Blue Ridge Unit “A” CHS Ltd. However, it set aside the portion of the order that pertained to increased Floor Space Index (FSI), clarifying that disputes regarding FSI must be adjudicated by a competent civil court.

The judgment emphatically reinforces homebuyers' rights under MOFA , ensuring developers cannot use extended project timelines under town planning laws to indefinitely delay property conveyance. It clarifies that MOFA 's strict four-month conveyance rule is designed to provide timely ownership to flat purchasers and cannot be circumvented by developers citing MRTP notifications or agreement clauses. This ruling serves as a significant victory for homebuyers and strengthens the legal framework protecting their property rights in Maharashtra.