[Maharashtra Ownership Flats Act] Private Agreements Cannot Override Statutory Duty To Grant Deemed Conveyance: Bombay High Court

The Bombay High Court has held that internal agreements or contractual clauses between the promoter and flat purchasers cannot override the statutory mandate of granting deemed conveyance under Section 11 of the Maharashtra Ownership Flats Act, 1963. The Court observed that once construction is completed in accordance with the sanctioned plan and the society is formed, the promoter's obligation to convey his right, title and interest in the land and building becomes absolute, subject only to what is reflected in the sanctioned plan and law. Justice Amit Borkar was hearing a writ petition filed challenging the order of the Competent Authority granting a deemed conveyance in favour of the respondent co-operative housing society. The promoter contended that he was always ready and willing to execute conveyance, but subject to rights expressly reserved under Clauses 23, 24 and 28 of the individual agreements for sale. It was argued that these clauses preserved a right of way and a reservation of balance FSI in favour of the promoter, and that the Competent Authority travelled beyond the terms of the agreement by directing conveyance. The society submitted that the promoter had failed to execute conveyance within the statutory period, compelling recourse to Section 11. Examining the rival contentions, the Court held that the agreements must be read in the light of the statutory scheme of MOFA, which is a welfare legislation enacted to protect flat purchasers. Section 11 enforces an existing statutory duty cast upon the promoter to execute the conveyance within the prescribed time. A private agreement cannot dilute or defeat that obligation. If a contractual clause seeks to retain with the promoter what the statute mandates to be conveyed, such a clause cannot prevail. It observed:“Contractual clauses are valid only so long as they do not defeat the statute. If a clause seeks to retain for the promoter what the statute requires him to convey, that clause cannot prevail. The Court must give primacy to the statute.”On the objection regarding the alleged disqualification of office bearers and absence of a proper resolution, the Court held that such issues pertain to the internal management of the society and cannot ordinarily be agitated by an outsider promoter to defeat a statutory claim. Proceedings under Section 11 are intended to enforce a statutory obligation in the public interest. Unless it is shown that the application was fraudulent or not supported by the society at all, internal procedural irregularities do not vitiate the jurisdiction of the Competent Authority.“Even assuming there were defects in the internal process, such defects would not nullify a statutory claim unless it is shown that the society itself did not support the action or that the application was fraudulent or mala fide,” the Court observed,Finding no jurisdictional error or manifest illegality in the order of the Competent Authority, the High Court dismissed the writ petition and upheld the deemed conveyance in favour of the society.Case Title: Krishna Developers Pvt. Ltd. v. The District Deputy Registrar Co-op Soc & Ors. [Writ Petition No. 4542 of 2024]Citation: 2026 LiveLaw (Bom) 83Click Here To Read/Download Order

[Maharashtra Ownership Flats Act] Private Agreements Cannot Override Statutory Duty To Grant Deemed Conveyance: Bombay High Court

Saksham Vaishya

Tags