Writ Court Should Not Interfere With Order Granting Deemed Conveyance U/S 11(4) MOFA Unless It’s Manifestly Illegal: Supreme Court
Justice Abhay S. Oka, Justice Ujjal Bhuyan, Supreme Court
The Supreme Court held that the Writ Court should not interfere with the Order granting deemed conveyance under Section 11(4) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, unless the same is manifestly illegal.
The Court held thus in a Civil Appeal filed against the Judgment of the Bombay High Court’s Single Bench.
The two-Judge Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan observed, “In writ jurisdiction, the Court should not interfere with the order granting deemed conveyance under Section 11 (4), unless the order is manifestly illegal. The writ court should generally be slow in interfering with such orders. The reason is that, notwithstanding the order under Section 11(4), the remedy of aggrieved parties to file a civil suit remains open.”
Factual Background
One Champaben Hiralal Shah owned a plot of land and in 1972, she and the Hindu Undivided Family (HUF) consisting of her three sons constituted a partnership firm via execution of a partnership deed. The larger plot was her contribution to the firm's capital. After her death, the firm was reconstituted, amongst the rest of the partners, as per the deed of reconstitution in 1983. A deed of dissolution of partnership was executed in 1987 and the firm was dissolved. The larger plot was partitioned between one Lalbhai H. Shah (predecessor of the Respondents) and one Arun H. Shah (the Karta of the Appellant). The portion of the larger plot was allotted to Lalbhai being the Manager and Karta of HUF. The remaining portion was allotted to Arun as the Karta and Manager of Arun Hiralal Shah HUF (Appellant). It was provided that construction on the Lalbhai Plot will be restricted to the development potential thereof, and the construction on the Arun Plot will be restricted to the development potential thereof in accordance with the prevailing Development Control Regulations.
Lalbhai took over the firm as the sole proprietor. It was provided that if Lalbhai transfers his interest in favour of an organisation of flat purchasers, then Lalbhai/such organisation would execute a perpetual lease in favour of the Appellant or its nominees in respect of the Arun plot. The Respondent firm was constituted with Lalbhai as one of its partners, which constructed a building. The Respondent firm entered into flat purchase agreements (FPAs) with the flat purchasers. In 1993, the Municipal Corporation of Greater Mumbai (MCGM) issued an occupation certificate in respect of the building. The Respondent co-operative society was formed and registered in 2005, which filed a Complaint before the Additional Consumer Disputes Redressal Forum, Mumbai, seeking conveyance of only the Lalbhai Plot. The District Forum allowed the Complaint and then the Respondent society filed an Application under Section 11(3) of MOFA, seeking a deemed conveyance of the Lalbhai Plot. It was also allowed and ex-parte deemed conveyance in respect of the larger plot was granted. Being aggrieved, the Appellant filed a Writ Petition before the High Court, which confirmed the competent authority’s Order. Hence, the Appellant approached the Apex Court.
Reasoning
The Supreme Court in the above regard, said, “The MOFA is a beneficial legislation enacted to protect home buyers, considering the ever-increasing housing shortage in urban areas. The Legislature has noted the increasing malpractices by the developers. The provisions of Section 11 are for the benefit of the flat purchasers.”
The Court added that in this case, substantial justice has been done by protecting the Appellant's rights as a perpetual lessee with a right to develop the Arun plot, and, therefore, interference in writ jurisdiction was not warranted.
“As held earlier, there is no reason to find fault with the impugned order dated 18th September 2020 of the competent authority and consequently, the impugned order of the High Court. The registration of the certificate issued under the impugned order of the competent authority shall be subject to the condition of the first respondent executing a permanent lease in favour of the appellant, as directed in the certificate appended to the impugned order dated 18th September 2020”, it further noted.
The Court also observed that the lease shall be on the terms and conditions incorporated in the deed of dissolution and the lease deed and even if such a lease is not executed in favour of the Appellant, the rights of the Appellant as a perpetual lessee in respect of the Arun plot shall remain unaffected.
“The first respondent cannot dispute the appellant's rights as a perpetual lessee”, it remarked.
Conclusion
The Court, therefore, summarised the following points on the interpretation of sub sections (4) and (5) of Section 11 of the MOFA –
i. It is no doubt true that quasi-judicial powers have been conferred on the competent authority while dealing with applications under Section 11(3) of the MOFA. However, proceedings before the competent authority under Section 11(3) are of a summary nature, as can be seen from the MOFA Rules. Therefore, the competent authority, while passing the final order, must record reasons;
ii. The competent authority, while following the summary procedure, cannot conclusively and finally decide the question of title. Therefore, notwithstanding the order under sub-section (4) of Section 11, the aggrieved parties can always maintain a civil suit for establishing their rights;
iii. The provisions of Section 11 are for the benefit of the flat purchasers. In writ jurisdiction, the Court should not interfere with the order granting deemed conveyance unless the same is manifestly illegal. The writ court should generally be slow in interfering with such orders. The reason is that, notwithstanding the order under Section 11(4), the remedy of aggrieved parties to file a civil suit remains open; and
iv. The registering officer has no power to sit in appeal over the order of the competent authority while exercising the power under Section 11(5). He can refuse registration only on the grounds indicated in paragraph 23 above and not beyond. Thus, the scope of the powers conferred on the registering officer is limited.
Accordingly, the Apex Court dismissed the Appeal.
Cause Title- Arunkumar H Shah HUF v. Avon Arcade Premises Co-operative Society Limited & Ors. (Neutral Citation: 2025 INSC 524)
