Monday, 23 May 2016

When owner of property can be said to promoter as per Maharashtra Ownership Flats Act 1963?

There is one more dimension to the matter.  As indicated
above, it is the owners, who had obtained the IOD and commencement
certificate   from   the   MCGM   and   it   is   through   the   medium   of   the
Respondent   No.   1   that   they   have   commenced   and   completed   the
construction.  Therefore, in terms of Section 2(c) of the MOFA, which
takes within its sweep the person who has caused the construction to be
the Promoter, the owners can be said to be the Promoters, as they have
admittedly caused the construction.   It is therefore their obligation to
see to it that the Society is conveyed what it is entitled to in terms of the
agreement entered into with the flat purchasers by the Respondent No.
1, which, in the instant case is the right to get a lease in its favour.  In

my view, since the owners having abdicated their obligation under the
MOFA   of   conveying   the   property   to   the   Society,   the   Competent
Authority has rightly intervened in the matter by passing the impugned
order.     In   my   view,   the   impugned   order   granting   the   deemed
conveyance has therefore to be construed in the context of the rights
the Developer had i.e. the right to get a lease from the owners.  Hence,
the impugned order cannot be faulted with on the ground that the
operative part of the order is vague or ambiguous.
IN  THE  HIGH  COURT  OF  JUDICATURE  AT  BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9116 OF 2013
Farhat Co­op Housing Society Ltd 
versus
M/s. Malkani Enterprises 

CORAM :­ R. M. SAVANT, J.

Pronounced on  :­ SEPTEMBER 23, 2014
Citation;2016(3) ALLMR210


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,   Co­operative   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 sqare 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 Co­operative
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 1961­62 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. 22­1 part, 23­3 part, 23­4 part and
24­1 part.  It is out of the said old survey numbers that the plot of land,
of which deemed conveyance is granted is a part.  It is pursuant to the
said conveyance that in the record of rights, the names of Khatijabai i.e.
the widow of Haji Esmail Aziz Dathawala and the Respondent Nos. 3 to
11 came to be entered into as Kabjedars, as per Mutation Entry No. 577
on 13th September, 1963.  This is how the Respondent Nos. 3 to 11 can

be said to have acquired title to the land in question, in respect of
which, deemed conveyance has been granted.
6) It appears that the said Khatijabai and the Respondent Nos.
3 to 11 being the owners, applied for commencement certificate on 26th
December, 1974 to the Municipal Corporation of Greater Mumbai (for
short “MCGM”) to construct a building on the specially divided plot of
land bearing CTS No. 68B admeasuring 3375 square meters.  The said
permission sought was applied in the name of the Respondent No. 6
herein, who is the son of the said Khatijabai.   The Respondent No. 6
accordingly submitted plans and specifications.   The MCGM issued a
notice of requisition dated 31st  January, 1975, pursuant to which, the
Respondent No. 6 furnished an undertaking on 20th  February, 1975.
The MCGM thereafter issued the IOD on 21st  March, 1975 and the
commencement certificate dated 7th March, 1975.  It appears that after
the IOD and the commencement certificate were issued, the owners i.e.
the Respondent Nos. 3 to 11 found it necessary to induct some third
party to help and assist them in the construction and completion of the
building, and accordingly brought in the Respondent No. 2 herein i.e.
Ibrahim Essa as a contractor/partner.   The Respondent Nos. 3 to 11
herein, along with the said Ibrahim Essa and Hasam Esmail formed and
constituted a partnership firm in the name of M/s. Malkani Enterprises

i.e. the Respondent No. 1 herein, having two partners i.e. the outsider
Mr. Ibrahim Essa and Mr. Hasam Esmail Malkani, who is the Respondent
No. 3 herein.  It is pursuant thereto that the owners i.e. the Respondent
Nos. 3 to 11 agreed to grant a lease of the plot of land in favour of the
Respondent No. 1 M/s. Malkani Enterprises, which, as indicated above,
was a partnership firm therefore having a separate legal entity and
having two partners.  Accordingly, the agreement for lease between the
owners   i.e.   Khatijabai   and   others   and   Ibrahim   Essa   and   another
(partners of M/s. Malkani Enterprises), came to be executed on 8th
March, 1975.  It is pursuant to the said agreement for lease that the said
M/s. Malkani Enterprises developed the said plot of land and were
therefore the Developers insofar as the provisions of the MOFA are
concerned.
7) In the standard agreement for sale, which was printed, the
same contained a title certificate being Exhibit­A annexed to the said
agreement, wherein, the Advocate concerned has certified the title of
M/s. Malkani Enterprises as a Developer and as per the title certificate,
Khatijabai and others were the Lessors and that there was an agreement
of lease dated 8th  March, 1975 between the Lessors on one part and
Ibrahim Essa and another (partners of M/s. Malkani Enterprises) on the
other part in respect of the plot of land in question i.e. the land bearing

CTS No. 68/B.  It appears that simultaneously, standard agreement for
sale with the flat purchasers under the provisions of the MOFA came to
be printed along with title certificate issued on 23rd  February, 1975,
which, inter alia, contained recitals and clauses which make it clear that
M/s. Malkani Enterprises was a partnership firm.  The agreements for
sale which came to be printed in the year 1975 came to be printed on
stamp papers of Rs.5/­ and curiously, the same were signed by the
Respondent   Nos.   3,   6   and   7   representing   the   said   M/s.   Malkani
Enterprises.  It appears that the building “Farhat” got completed after a
delay of about 2 years and most of the flats were sold by agreements
executed   under   the   signatures   of   the   Respondent   Nos.   3,   6   and   7
singly/jointly in presence of each other under the name of M/s. Malkani
Enterprises, without any seal or stamp of the partnership firm or as
partner thereof.
8) Though the flats in the building were sold on the basis of
the standard agreement printed in the year 1975, the Respondent Nos.
3 to 11 being the owners and developers themselves, did not take any
steps to form a Society of the flat purchasers for about 15 years and
ultimately, the Society was formed by the flat purchasers themselves
coming together and was got registered on 21st November, 1988.  In the
proposal for registration, the Respondent No. 6 herein was shown as the

Chief Promoter of the Society.  The Respondent Nos. 3 to 6 herein, after
the Society was formed, were the Managing Committee Members in the
first Committee and issued share certificates to the members, however,
the owners failed to perform their obligations under the MOFA.  Since
the Respondent Nos. 3 to 6 were not discharging their duties as the
Managing Committee Members in the interest of the Society, a new
Managing   Committee   took   over   the   Society.     On   account   of   the
negligence of the Managing Committee, there was no maintenance of
the building of the Society and at present the building is in a bad shape
and it is the case of the Society that it requires immediate attention.  It
seems that the Society obtained the report of a Structural Engineer and
Architect, who advised it to go for reconstruction rather than repairs,
costing huge funds.  Accordingly, the Managing Committee resolved to
opt for redevelopment and entered into agreement and memorandum
of understanding for redevelopment of the property of the Society with
a developer.   It is in November, 2012 that the Society, to facilitate
redevelopment, applied for deemed conveyance under the provisions of
Section   11(3)   of   the   MOFA   by   filing   an   application   before   the
Competent   Authority,   who   is   the   authority   appointed   by   the   State
Government for the same.
9) It was the case of the Society in the said application that it
was a registered Co­operative Society and the building of the Society

has two wings 'A' and 'B' having 30 flats each and total 60 members of
the Society.   It was further averred that the agreement with the flat
purchasers   were   under   the   MOFA   and   in   terms   of   the   MOFA,   the
Respondents to the said application have not fulfilled their obligation of
convening   the   property   to   the   Society   within   four   months   of   the
registration of the Society.  The Society highlighted clause No. 25 in the
flat   purchasers   agreement,   a   copy   of   one   of   such   agreements   was
produced before the authority.  In terms of the said clause 25, it was the
case of the Society that the Society was entitled to the lease from the
Respondents.  It was further averred that though the Society has issued
notices to the Respondents on 8th December, 2006 and 13th December,
2006 calling upon them to fulfill their obligation under the MOFA, they
have   failed   to   do   so   and   therefore,   the   Society   was   left   with   no
alternative but to file the said application.  The fact that the Society has
filed a criminal case against the Respondents for not fulfilling their
obligation   to   convey   the   property   was   also   mentioned   in   the   said
application.
10) Pursuant to the said application, notices came to be issued
by the Competent Authority to all the Respondents and also to the
public at large, by publishing the said notices in the local newspapers.
It appears that initially the Respondent Nos. 1 to 11 were represented

by the same Advocate and did not take any steps to file their Written
Statement or reply to the said application filed by the Society.  It is after
the commencement of the proceedings under Section 11(3) that the
owners, through their Advocate, issued a notice dated 24rd November,
2012 to the Respondent No. 1 i.e. M/s. Malkani Enterprises, terminating
the monthly tenancy in respect of the open plot of land, on which the
building with the Society is situated, on the ground of arrears of rent for
about 20 years.   A copy of the said notice was also endorsed to the
Society,   however,   significantly   without   making   any   grievance   or
allegation of whatsoever nature against the Society.   After the notice
period was over, the Respondent Nos. 3 to 11 filed an Eviction Suit
being No. T. E. & R. Suit No. 4/4 of 2013 in the Small Causes Court at
Bandra, Mumbai, against the Respondent No. 1 for possession of the
plot of land in question, on the ground of breach of the conditions of
the lease in the matter of non payment of the lease rent.
11) In the said Suit, it appears that writ of summons came to be
issued   upon   the   Respondent   No.   1   herein   and   thereafter,   the
Respondent   Nos.   3   to   11   filed   an   application   for   stay   against   the
Respondent No. 1.   It is after filing of the said Eviction Suit that a
Written Statement came to be filed on behalf of the Respondent Nos. 3
to 11 in the deemed conveyance proceedings.   It was stated in the

Written Statement that the Respondent No. 2 has expired, however, no
efforts have been made to bring his legal heirs on record.  It was stated
that the necessary documents as per Circular dated 2nd November, 2010
and 28th February, 2011 have not been produced.  It was stated that the
application is not in the prescribed Form No. VII.  It was further stated
that the Respondent No. 1 M/s. Malkani Enterprises has constructed the
building known as Farhat and the applicant Society has been registered
in the year 1988.   It was stated that the applicant Society has been
informed that the property is given on monthly tenancy of Rs. 1750/­ to
the Respondent No. 1.   It was further stated that the Society has not
paid rent to the  Respondent Nos.  3  to 11.   It was stated that the
Respondents have cancelled the tenancy and that they have filed a Suit
in   the   Small   Causes   Court   against   the   Respondent   No.   1   and   the
application is therefore liable to be dismissed.
12) In the said proceedings, one Mushtaq H. Malkani, the son
of the Respondent No. 3 and claiming to be the partner/authorized
signatory of the  Respondent No. 1, appeared before the Competent
Authority and filed an application for being permitted to file a Written
Statement.     The   said   application   was   opposed   to   on   behalf   of   the
Society.     It   appears   that   inspite   of   the   opposition   of   the   Petitioner
Society   to   the   intervention   of   the   said   Mushtaq   H.   Malkani,   his

application was entertained by the Competent Authority and he was
permitted to file his Written Statement.  The said Mushtaq H. Malkani
filed the Written Statement on behalf of the Respondent No. 1 herein.
It was stated in the Written Statement that the Respondent Nos. 3 to 11
have cancelled the tenancy of the Respondent No. 1 by a letter dated
24th November, 2012, copy of which was also endorsed to the Society.  It
was further stated in the said Written Statement that the Society i.e. the
applicant has not paid the lease rent and that the Respondent No. 1,
after   the   said   termination,   has   no   right   of   any   nature   in   the   said
property.  It was stated that the Respondent Nos. 3 to 11 have filed a
Suit for eviction, for recovery of arrears of rent in the preceding three
years together with interest at 15% till disposal of the Suit.   It was
stated that since the Suit is pending, the claim made in the application
cannot be granted.  It was also stated that the applicant Society has not
produced necessary documents and that whatever documents have been
produced are not authenticated as required by the rules.  It was further
stated that the property is not in possession of the Society and that the
Respondent No. 1 has never agreed to transfer/convey the lease in
respect of the said property to the applicant Society.  It was therefore
prayed that the application be dismissed.
13) The Society in turn filed its reply to the Written Statements
filed on behalf of the Respondents.  It was stated in the said reply by the

Society that the Developers and owners are one and the same party.
The Society stated that the plot is not vacant and that there is a building
thereon.   It was further stated that the said fact has been suppressed
from the Small Causes Court, wherein, the Respondent Nos. 3 to 11
have filed a Suit.  The Society questioned the maintainability of the Suit
on   the   ground   that   such   a   Suit   was   not   maintainable   under   the
provisions of the Maharashtra Rent Control Act, 1999.  The Society in
its reply traced how the owners had acquired title.   The Society also
stated that the commencement certificate has been obtained by one
Abdul Sattar on behalf of the owner Khatijabai and the undertaking to
the MCGM has also been given by Abdul Sattar.  The Society pointed
out that the flat agreements could not be registered earlier in view of
the non co­operation of the owners, but have been registered later on
under   the   Amnesty   Scheme.     It   was   stated   that   the   proposal   for
formation of the Society has been signed by the land owners as different
Promoter and that the Respondent No. 6, who is from the family of the
land owners was the Chairman of the Society for a long time.
14) To the reply filed by the Society, the Respondent Nos. 3 to
11 filed their rejoinder, wherein, the sum and substance was that the
entertaining   the   application   filed   by   the   Society   would   amount   to
interfering with the proceedings pending in the Small Causes Court.

The application for deemed conveyance was heard on 4th  April, 2013
and inspite of the objection of the Society to the filing of the pleadings
on behalf of the Respondent No. 1 on account of non verification of
pleadings and the locus standi of the Respondent No. 1, the Competent
Authority overruled the said objections and closed the matter for orders.
It is thereafter that the impugned order came to be passed on 6th May,
2013, by which order, as indicated above, the application for deemed
conveyance   was   allowed   by   the   Competent   Authority,   however,   the
same was made subject to the final decision in T. E. & R. Suit No. 4/4 of
2013.   The Competent Authority, whilst allowing the application, has
inter   alia  held   that   the   applicant   Society   has   complied   with   the
requirement   by   filing   the   necessary   documents.     The   Competent
Authority held that in view thereof, there is no propriety in the said
technical   defects,   which   are   sought   to   be   highlighted   by   the
Respondents.  The Competent Authority held that the flats have been
sold under agreements on ownership basis to different persons by the
Respondent No. 1 and that the said agreements are executed under the
MOFA.  The Competent Authority held that in view thereof, the rights in
the said property have been transferred from the land owners to the
applicant Society.  The Competent Authority held that the full FSI has
been utilised to construct a building having six floors.  The Competent
Authority adverted to clause 25 of the flat purchasers' agreement and in

view thereof, held that the Society of the flat purchasers would be
entitled to the lease being executed in favour of the Society by the
Respondents.     The   Competent   Authority   held   that   the   same   was
required to be done within four months of the registration of the Society
but has not been done till date, though the Society has been registered
on   21st  November,   1988.     The   Competent   Authority   held   that   the
Respondent Nos. 3 to 11 are required to execute a lease agreement in
favour of the Society and that it was the obligation of the Developer
under the MOFA to transfer/convey the lease rights in respect of the
plot of land in favour of the Society.  The Competent Authority held that
the Respondents cannot avoid their statutory obligation and that the
Respondent Nos. 1 to 11 are all Developers and are obliged to comply
with   clause   25   of   the   flat   purchasers   agreement.     The   Competent
Authority,   however,   thereafter,   by   observing   that   since   the   Suit   is
pending in the Small Causes Court, the order of deemed conveyance
would have to be passed making it subject to the final decision of the
said   Suit   and   accordingly   passed   an   order   to   the   said   effect.     As
indicated above, it is the said order, which is impugned in the present
Petitions.
15) Heard the learned Counsel appearing for the parties.

SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. R.M. KADAM FOR THE PETITIONER IN WP/9116/2013:
16) (i) That   the  Competent   Authority,   after   allowing   the
application for deemed conveyance filed by the Petitioner Society has
thereafter   erred   in   making   the   deemed   conveyance   conditional   i.e.
making it subject to the result of the Suit being T. E. & R. Suit No. 4/4
of 2013, thereby rendering the order ineffective.
(ii) That the  Competent Authority  failed to appreciate
that   the   Suit   filed   by   the   Respondent   Nos.   3   to   11   against   the
Respondent No. 1 was a collusive Suit, and was also filed malafide so as
to   frustrate   the   application   for   deemed   conveyance   filed   by   the
Petitioner Society.
(iii) That   the   application   filed   for   deemed   conveyance
against the Respondent Nos. 3 to 11 i.e. the owners was maintainable in
view   of   the   fact   that   the   owners   can   be   said   to   have   caused   the
development by agreeing to grant a lease to the Respondent No. 1,
which is a partnership firm of the owners themselves.
(iv) That   the   Respondent   No.   1   is   a   partnership   firm
where one of the partners is belonging to the family of the Respondent
Nos. 3 to 11 and since there is an Agreement to Lease in favour of the
Respondent No. 1 from the Respondent Nos. 3 to 11, the Society is
entitled to get the right of the Respondent No. 1 conveyed in its favour.

(v) Since  the  owners can  be said to have  caused the
development, the Petitioner is entitled to a deemed conveyance of the
owners' rights in respect of the plot of land in question, having regard to
the definition of Promoter/Developer in the MOFA.
(vi) That   the   Society   cannot   be   deprived   of   its
entitlement for deemed conveyance on the ground that – Respondent
No. 1 who is the developer had only a right to an Agreement to Lease.
(vii) That there is a compliance of rules insofar as the
filing of the application for deemed conveyance is concerned, as the
Competent   Authority  has   observed   so   in   the   impugned   order   and
therefore the contentions urged on behalf of the Respondents that the
application was incomplete cannot be accepted.
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. M.R. SATHE FOR THE PETITIONERS IN WP/10356/2013:
17) (i) That the Competent Authority has erred in granting
deemed conveyance to the Petitioner Society when there is no privity of
contract between the Petitioner Society and the Respondent Nos. 3 to
11.
(ii) That the application filed by the Petitioner Society is
incomplete   as   the   MOFA   agreements   were   not   annexed   to   the
application  nor is the  statement filed along with the  application  in

respect   of   the   various   flat   purchasers   complete   and   therefore,   the
Competent Authority has erred in entertaining the said application.
(iii) In   terms   of   the   Section   11(1)   of   the   MOFA,   the
deemed   conveyance   has   to   be   in   respect   of   the   rights   of   the
Promoters/Developers in  the  plot of land.   In the  instant case,  the
Developer i.e. the Respondent No. 1 has only an Agreement to Lease in
his favour, whereby, the Respondent Nos. 3 to 11 have agreed to grant
lease to it, however, till such time, as lease is executed, the Respondent
No. 1 is a monthly tenant and therefore, at the highest the Petitioner
Society would therefore have the right to monthly tenancy.
(iv) That   the   impugned   order   discloses   that   the
Competent Authority was not sure as in respect of which right of the
Promoter/Developer deemed conveyance is granted and therefore, the
direction   in   the   operative   part   of   the   impugned   order   contains
alternatives.     This   could   not   have   been   done   by   the  Competent
Authority whilst exercising the power under Section 11, as the deemed
conveyance has to be granted in respect of an ascertainable right, which
is in the Developer/Promoter.
(v) Since the Respondent No. 1 is a monthly tenant, the
Petitioner Society could only be entitled to the right of the Respondent

No. 1 namely the monthly tenancy and could not have been given the
deemed conveyance of the assignment of the lease.
(vi) That   though   the   Respondent   No.   2   had   expired,
which fact was brought to the notice of the Advocate appearing for the
Society, the application was not amended so as to bring his heirs on
record.  The impugned order is therefore passed against a dead person
and therefore a nullity.
SUBMISSIONS OF THE LEARNED SENIOR COUNSEL
SHRI. A.Y.SAKHARE FOR THE RESPONDENT NO. 1 IN WP/9116/13:
18) (i) The   learned   Senior   Counsel   appearing   for   the
Respondent No. 1 reiterated the submissions urged on behalf of the
Respondent   Nos.   3   to   11   as   regards   the   incompleteness   of   the
application   filed   by   the   Petitioner   Society   under   Section   11   of   the
MOFA.   The learned Senior Counsel sought to point out the rationale
behind   the   documents   which   are   to   be   submitted   along   with   the
application for deemed conveyance and which are mentioned in the
circular dated 21st March, 2011 issued by the Competent Authority.
(ii) He further submitted that the Competent Authority
could   have   granted   deemed   conveyance   only   of   a   ascertainable
right/interest of the Promoter/Developer and could not have passed the
order which can be said to be vague insofar as the subject matter of

deemed conveyance, as in the operative part, the Competent Authority
has mentioned alternatives.
CONSIDERATION:
19) Before proceeding to deal with the issues which arise in the
light of the contentions urged on behalf of the parties, it would be
apposite to refer to the objects and reasons behind introducing the
amendments in the MOFA and especially Section 5A i.e. to setup the
machinery of the Competent Authority for the purposes of exercising
powers and performing the duties under Sections 10 and 11 of the
MOFA.  The objects and reasons spell out, that it is on account of sundry
abuses and malpractices, which were on the increase on account of
acute shortage of housing in several parts of the State, that the State felt
a need to curb the said malpractices and to see to it that the purposes
for which MOFA was introduced were fulfilled.   It was felt that the
provisions of the MOFA were required to be made more effective, so as
to safeguard the interest of the flat purchasers.  It is with the said intent
that the amendments were introduced.  The intent being to see to it that
the Promoters fulfill their obligations under Sections 10 and 11 of the
MOFA.  The objects and reasons behind introducing the amendment in
the MOFA read thus:
“ The   Maharashtra   Ownership   Flats   (Regulation   of   the
Promotion of Construction, Sale, Management and Transfer)

Act,   1963   has   been   enacted   by   the   Government   of
Maharashtra in the year 1963 to regulate for a certain period
in the State, the promotion of the construction of, the sale
and management and the transfer of flats on ownership basis.
The   said   Act   has   been   enacted   to   effectively   prevent   the
sundry abuses and malpractices which had been on increase,
consequent upon the acute shortage of housing in the several
areas of the State.
It has come to the notice of the Government that the
objective   behind   enactment   of   the   said   law   is   not   fully
achieved   and   its   implementation   has   not   been   effective
enough to curb certain malpractices and sundry abuses by the
promoters   or   developers   of   the   properties.     Therefore,   to
make   provisions   of   the   said   Act   more   effective   and   to
safeguard   interests   of   the   purchaser   of   the   flats,   the
Government of Maharashtra considers it expedient to carry
out certain amendments to the existing provisions of the said
Act.  The important amendments produced to be carried out
are as follows:
(a) It is proposed to provide for appointment of one or
more   Competent   Authorities   for   different   local   areas   who
would, on failure on the part of the promoter,
(i) to form a co­operative society of the persons
who   have   purchased   the   flats   from   the   promoter,   on
application received from such purchasers, direct the District
Deputy Registrar, Deputy Registrar or, as the case may be, the
Assistant Registrar of Co­operative Societies to register the cooperative
society of such flat owners:
(ii) to   execute   a   conveyance   within   the
prescribed period as provided in Section 11, on receiving an
application from the flat owner members of a co­operative
society, issue a certificate to such society certifying that the
said society was entitled to have a conveyance registered and
that it is a fit case for execution of a unilateral conveyance as
a 'deemed conveyance' in favour of the said society, by the
Registration Officer under the Registration Act, 1908.
(b) To serve as a deterrent, a provision is also being
made for disqualifying a promoter, convicted under the said
Act (except under section 12A), for a period of five years so
as to debar him from being granted any permission by the
local   authorities   under   the   relevant   laws   for   undertaking
construction of flats.
(c) The proceedings before the Competent Authority
are given the status of judicial proceedings for the purposes of
sections 193 and 228 of the Indian Penal Code and every

Competent Authority is to be deemed to be a Civil Court for
the purpose of sections 345 and 347 of the Code of Criminal
Procedure, 1973.”
20) In the context of the challenge raised in the above Petitions,
it would be apposite to reproduce Sections 5A, 10 and 11 of the MOFA,
which read thus:
“5A.   Competent Authority
The State Government may, by notification in the Official
Gazette, appoint an officer, not below the rank of the District
Deputy   Registrar   of   Co­operative   Societies,   to   be   the
Competent Authority, for an area or areas to be specified in
such notification and different officers may be appoint as
Competent   Authority   for   different   local   areas,   for   the
purposes of exercising the powers and performing the duties
under Sections 5, 10 and 11 of this Act.
10.   Promoter to take steps for formation of co­operative
society or company
[(1)As soon as a minimum number of persons required to
form a co­operative society or a company have taken fiats,
the promoter shall within the prescribed period submit an
application   to   the   Registrar   for   registration   of   the
organisation of persons who take the flats as a co operative
society   or,   as   the   case   may   be,   as   a   company;   and   the
promoter shall join, in respect of the flats which have not
been   taken,   in   such   application   for   membership   of   a   cooperative
  society   or   as   the   case   may   be   of   a   company.
Nothing in this section shall effect the right’ of the promoter
to   dispose   of   the   remaining   flats   in   accordance   with   the
provisions of this Act.
Provided that,  if   the   promoter   fail   within   the   prescribed
period   to   submit   an   application   to   the   Registrar   for
registration   of   society   in   the   manner   provided   in   the
Maharashtra Co­operative Societies Act, 1960, the Competent
Authority   may,   upon   receiving   an   application   from   the
persons who have taken flats from the said promoter, direct
the District Deputy Registrar, Deputy Registrar or, as the case
may be, Assistant Registrar concerned, to register the society:
Provided   further   that,  no   such   direction   to   register   any
society under the preceding proviso shall be given to the
District Deputy Registrar, Deputy Registrar or, as the case may
be, Assistant Registrar, by the Competent Authority without

first   verifying   authenticity   of   the   applicants   request   and
giving the concerned promoter a reasonable opportunity of
being heard.
11. Promoter to convey title, etc. and execute documents,
according to agreement.
(1) A   promoter   shall   take   all   necessary   steps   to
complete his title and convey to the organisation of persons,
who take flats, which is registered either as a co­operative
society or as a company as aforesaid, or to an association of
flat takers or apartment owners his right, title and interest in
the land and building, and execute all relevant documents
therefor in accordance with the agreement executed under
section 4 and if no period for the execution of the conveyance
is agreed upon, he shall execute the conveyance within the
prescribed   period   and   also   deliver   all   documents   of   title
relating to the property which may be in his possession or
power.
(2) It shall be the duty of the promoter to file with the
Competent Authority, within the prescribed period, a copy of
the conveyance executed by him under sub­section (1).
(3) If the promoter fails to execute the conveyance in
favour of the co­operative society formed under Section 10
or, as the case may be, the company or the association of
apartment owners, as provided by sub­section (1), within the
prescribed period, the members of such co­operative society
or, as the case may be, the company or the association of
apartment owners may, make an application, in writing to the
concerned   Competent   Authority   accompanied   by   the   true
copies of the registered agreements for sale, executed with
the promoter by each individual member of the society or the
company or the association, who have purchased the flats
and all other relevant documents (including the occupation
certificate, if any) for issuing a certificate that such society, or
as the case may be, company or association, is entitled to
have   an   unilateral   deemed   conveyance,   executed   in   their
favour and to have it registered.
(4) The   Competent   Authority,   on   receiving   such
application, within reasonable time and in any case not later
than   six   months,   after   making   such   enquiry   as   deemed
necessary   and   after   verifying   the   authenticity   of   the
documents   submitted   and   after   giving   the   promoter   a
reasonable opportunity of being heard, on being satisfied that
it   is   a   fit   case   for   issuing   such   certificate,   shall   issue   a

certificate   to   the   Sub­Registrar   of   any   other   appropriate
Registration   Officer   under   the   Registration   Act,   1908,
certifying   that   it   is   a   fit   case   for   enforcing   unilateral
execution of conveyance deed conveying the right, title and
interest of the promoter in the land and building in favour of
the applicant, as deemed conveyance.
(5) On submission by such society or as the case may
be, the company or the association of apartment owners, to
the Sub­Registrar or the concerned appropriate Registration
Officer   appointed   under   the   Registration   Act,   1908,   the
certificate issued by the Competent Authority along with the
unilateral instrument of conveyance, the Sub­Registrar or the
concerned   appropriate   Registration   Officer   shall,
notwithstanding anything contained in the Registration Act,
1908, issue summons to the promoter to show cause why
such   unilateral   instrument   should   not   be   registered   as
deemed conveyance and after giving the promoter and the
applicants a reasonable opportunity of being heard, may on
being satisfied that it was a fit case for unilateral conveyance,
register that instrument as deemed conveyance.
21) After   having   referred   to   the   aforesaid   provisions   of   the
MOFA, it would now be necessary to deal with the contentions raised on
behalf of the parties.   It is the contention of the Petitioners in Writ
Petition No. 10356 of 2013 i.e. the owners that the application filed by
the Society was not complete inasmuch as the requisite documents were
not   annexed   and   therefore,   the   application   could   not   have   been
entertained   by   the   Competent   Authority.     In   support   of   the   said
contention, reliance was sought to be placed by the owners on the
circular dated 21st  March, 2011, which sets out the documents which
are required to be annexed to an application for unilateral deemed
conveyance.  In the said circular, about 29 documents have been listed.
A perusal of the impugned order passed by the Competent Authority,

however, discloses the documents, which have been produced by the
Society   in   the   said   deemed   conveyance   proceedings.     The   said
documents are the Agreement to Sale entered into with one of the flat
purchasers,   the   title   certificate,   the   permission   obtained   by   the
Promoters   for   the   construction   of   the   building.     The   Competent
Authority   i.e.   the   Respondent   No.   12   herein   also   observed   in   the
impugned order that the objection raised on behalf of the owners was
technical and that the matters would have to be looked into from the
angle of the merits of the application.   The Competent Authority has
referred to the clause in the Agreement to Sale of the flat purchasers,
wherein,   it   is   mentioned   that   the   Respondent   No.   1   M/s.   Malkani
Enterprises has an Agreement to Lease from the owners, which is dated
8
th  March,   1975   and   that   the   lease   rent   payable   to   the   owners   is
Rs.1750/­ per month.  In the context of the said technical plea raised by
the owners, it would also be necessary to consider the Rules, which
have  been  framed under the  MOFA, which rules are  known  as the
Maharashtra Ownership of Flats Rules, 1964.   Insofar as the present
Petition is concerned, Rule 13 is relevant Rule, which, for the sake of
convenience, is reproduced hereinunder:
“13. Scrutiny of applications and notice to the parties, etc.
(1) Registration of applications.
(a) On receipt of an application, the office of the
Competent Authority shall endorse on it the date of its receipt
and shall as soon as possible, examine it and satisfy itself that

the   person   presenting   it   has  authority   to   do   so   and   that   it
conforms with all the provisions of the Act and the Rules made
thereunder.
(b) If the Competent Authority is satisfied that
the  application  is complete  in all  respect, it  shall cause the
application to be registered, as admitted, in the appropriate
register maintained under these Rules.
(c) If   the   application   is   not   complete,   the
Competent Authority may sent notice in the Form VIII, to the
applicant/s   to   rectify   the   defects   or   comply   with   such
requirements,   as   it   may   deem   fit   to   conform   with   all   the
provisions of the Act, and these Rules, within a period of fifteen
days of the receipt of the said notice.  The Competent Authority
may, for sufficient cause, may give further extension of not more
than fifteen days to comply with the requirements.
If the above defect in an application is rectified, the
Competent Authority shall cause it to be admitted and register
the application in the appropriate register.
(2) Maintenance   of   registers   and   procedure   for
issuing notice, etc.
The   Competent   Authority   shall   maintain   the
register of applications received by it in Form IX.
On   admitting   the   application,   the   competent
Authority shall, within a period of fifteen days thereof, issue a
notice in Form X to the opponent/s requiring him/them to file
the written statement on the day, date and place as may be
specified therein.  Such notice shall be served on the opponents
by registered post acknowledgment due or under certificate of
posting on the last known address.
(3) Appearance of parties and consequences of non
appearance.
(a) On the date fixed as aforesaid, the opponent
shall appear either in person or through his Advocate or his
authorized Representative before the Competent Authority and
shall file a written statement.
(b) On   the   date   of   hearing,   if   the   applicant
appears and the opponent or any of the opponents, does not or
do not appear, as the case may be, the Competent Authority
shall decide the application ex­parte:
Provided that, before deciding the Application, if
the Opponent appears and shows a sufficient cause for his nonappearance
on the earlier occasions, he shall be heard in the
matter as if he had appeared before the Competent Authority on
the first day
(c) If on the date fixed for hearing or on any

other day to which the hearing may be adjourned, the applicant
does   not   appear   either   in   person   or   by   his   Authorised
Representative,   when   application   is   called   for   hearing,   the
Competent Authority may dismiss the application.
(d) If, on the date fixed for hearing or any other
day to which the hearing may be adjourned, the Opponent's
does/do   not   appear   either   in   person   or   through   his/their
Authorised Representative, when the Application is called for
hearing,   the   Competent   Authority   may   decide   the   same   on
merits   after   hearing   the   Applicant   or   his   Authorised
Representative, if present
(4) Production and inspection of documents.
(a) The parties shall file the documents referred
to in the pleadings at the time of filling application and written
statement, as the case may be.   If either party satisfies the
Competent Authority that any document is relevant and the
same is in the custody of the opposite party, the Competent
Authority  may,  by   an   order   in   writing,   direct   such   party   to
produce such document on the next date of hearing.
(b) If the party so ordered, fails to produce such
documents   on   the   next   date   of   hearing,   the   Competent
Authority may draw adverse inference against such party and
hearing of the original application shall not be postponed till
filing   of   such   documents   or   for   the   reasons   of   such   non
compliance of the order.
(c) If the Competent Authority is satisfied that
the   documents   required   to   be   produced,   cannot   be   brought
before the Competent Authority for sufficient reasons like its
volume or otherwise, the Competent Authority may allow the
opposite party to take inspection of the documents within seven
days from the date of order of such inspection.
(d) If the Competent Authority is satisfied that
the opponent had no access to the documents earlier and the
filing of additional statement is necessary, it may allow the filing
of such additional statement.
(5) Procedure for hearing the application.
(a) On receipt of the statement of the opponent,
the applicant shall prove contents of the application and also
deal with the contention of defenses.   The opponent likewise
may file reply in support of the defense on the next date, if he
so desires.  No cross­examination of any of the parties shall be
permitted.
(b) On   receipt   of   the   replies,   the   Competent
Authority shall proceed to hear oral arguments of the parties
and after hearing, shall close the proceedings for the order.
(c) The   Competent   Authority   shall,   within

reasonable time and in any case not later than six months from
the date of receipt of the application, after making such enquiry
deemed necessary and after verifying the authenticity of the
documents submitted by the parties and after hearing them and
giving the parties sufficient opportunities as required under the
Act and the principles of natural justice, pass such appropriate
order as it deems fit, as provided under the Act.
(6) Signing of order and the notice and the official
seal.
(a) Every Judgment, order and the certificate of
the   Competent   Authority   shall   be   delivered   or   supplied   or
provided to all the concerned parties.
(b) The   Competent   Authority   shall   have   an
Official Seal of its own, which shall be kept in the custody of the
Competent Authority.
(c) Every   judgment,   order,   certificate   and   the
notice issued under the Act or these Rules shall be signed by the
Competent Authority and shall bear the official seal on it.
(d) All the records of the Competent Authority
shall be kept in its custody.”
22) The said Rule therefore mandates the Competent Authority
to   scrutinize   the   application   and   after   being   satisfied   that   the
application   is   complete   in   all   respects,   cause   the   application   to   be
registered as admitted in the appropriate register maintained under the
said Rules.  If the application is not complete, then a notice is required
to be issued to the applicant to rectify the defects or comply with such
requirements.   The aforesaid Rules therefore lay down an elaborate
procedure post filing of the application for deemed conveyance upto
the stage of Judgment and Order.   In the instant case, it has been
observed by the Competent Authority that the Society had complied
with the requisitions made by the Authority and therefore, it appears

that the said application made by the Society was registered and placed
for adjudication.  In the light of the said Rule 13, it is not possible to
accept   the   contention   raised     on   behalf   of   the   owners   that   the
application   was   incomplete   and   therefore   could   not   have   been
entertained.     As   indicated   above,   it   is   only   after   the   Competent
Authority   is   satisfied   that   the   application   is   complete   that   the
application is to be registered as admitted and thereafter to be placed
for adjudication.  The Competent Authority in the impugned order has
referred to and in fact has listed the 16 documents which were filed by
the Society in support of its application.   The said 16 documents, for
ready reference, are as under:
“1. A notarized application in prescribed form no.7 under   
Rule 12, with Rs.2000/­ court fees stamp;
2. Copy of Resolution;
3. Copy of Agreement for sale/purchase.
4. List of members
5. 7/12 extract and village form no. 6
6. Property Tax
7. Notice for N. A. tax
8. City Survey map
9. Applicant   Society's   registration   certificate   dated    
21.11.1988
10. Intimation of Disapproval (I O D) dated 31.1.1975
11. Sanctioned building plan and survey map
12. Building commencement certificate dated 7.3.1975
13. Building completion certificate dated 2.12.1978
14. Vakalatnama

15. Documents in respect of case no. 102/M/2007 before   
Hon'ble Metropolitan Magistrate, Mumbai
16. Applicant's Affidavit”
 The learned AGP appearing in the matter was asked to produce
the record insofar as the said documents are concerned, the learned
AGP accordingly had produced the record and tendered the photocopies
of the Agreements to Sale, which were before the Competent Authority.
Having   regard   to   the   said   documents,   it   cannot   be   said   that   the
application was incomplete or that the application was lacking in any
particulars.  In my view, the Competent Authority was right in observing
that the objection raised on behalf of the owners was technical and the
matter   had   to   be   looked   into   in   the   context   of   the   merits   of   the
application, especially having regard to the mandate of the provisions of
the MOFA.  Hence, insofar as the said contention urged on behalf of the
owners is concerned, there is no merit in the same.
23) The next issue that is required to be dealt with is as to
whether the Suit being T. E. & R. Suit No. 4/4 of 2013 filed by the
owners   against   the   Partnership   firm   M/s.   Malkani   Enterprises   is   a
collusive Suit and therefore, the order of deemed conveyance could not
have been made subject to the result of the said Suit.  Insofar as the said
Suit is concerned, the facts which can be said to be germane to the said
Suit are the following:

The Respondent No. 1 is a partnership firm, which was entrusted
the task of carrying out the development of the plot of land in question,
as the owners had already obtained the IOD and the commencement
certificate from the MCGM.  One of the members of the owners' family
is a partner of the said partnership firm i.e. one Abdul Sattar Malkani.
The notice for termination has been issued after the application for
deemed conveyance was filed and it is pertinent to note that the owners
and the Respondent No. 1 i.e. M/s. Malkani Enterprises had appeared in
the   said   deemed   conveyance   proceedings,   but   had   not   filed   their
responses.   The owners and the Respondent No. 1 i.e. the said M/s.
Malkani Enterprises were represented by the same lawyer till just before
issuance of the notice of termination of the lease.  The third fact is that
the Suit has been filed for eviction of the said M/s. Malkani Enterprises
and for possession of the open land, without disclosing the factum of
the construction of the building, the formation of the Petitioner Society
and the filing of the application for deemed conveyance by the Society.
The fourth fact is that the Society pertinently has not been made a party
to the Suit.  The fifth fact, which is required to be noted is that an order
of injunction has been obtained in the said Suit against the said M/s.
Malkani   Enterprises   when   the   said   M/s.   Malkani   Enterprises   has
virtually no rights remaining in the property, after the completion of the
construction.  The sixth fact is that the owners and the Respondent No.1

have a commonality interest, which is substantiated by the fact that the
Respondent   No.   1   is   a   family   firm,   the   agreements   with   the   flat
purchasers have been signed by the Respondent Nos. 3, 6 and 7 either
singly or jointly on behalf of the firm, and they were represented by the
same lawyer in the deemed conveyance proceedings.   The aforesaid
facts are very eloquent and therefore unmistakably lead to an inference
that the said Suit being T. E. & R. Suit No. 4/4 of 2013 has been filed by
the owners merely to put obstacles in the way of the Society from
getting the deemed conveyance.  The said Suit, as indicated above, has
been filed without disclosing the fact that a building having two wings
has already been constructed comprising of about 60 flats.  The fact that
the Respondent No. 1 M/s. Malkani Enterprises has virtually no rights
remaining in the Suit plot has been conspicuously kept away from the
Small   Causes   Court   and   an   order   of   injunction   has   been   obtained
against   it.     Having   regard   to   the   aforesaid   facts,   the   inescapable
conclusion is that the Suit in question being T. E. & R. Suit No. 4/4 of
2013 is a collusive Suit between the owners and the Respondent No. 1
M/s. Malkani Enterprises, filed with sole objective of frustrating the
application for deemed conveyance filed by the Society.  By making the
said order contingent upon the decision that would be rendered in the
Suit, the Competent Authority has virtually made the grant of deemed
conveyance ineffective.   It is precisely on account of the machinations,

which were adopted by the Developers/Promoters to deny the Society
or condominium of flat purchasers the conveyance of the property that
the provisions of the MOFA were amended so as to provide for the grant
of  unilateral deemed conveyance.   In  my view therefore, the  order
passed by the Competent Authority of making the grant of deemed
conveyance   subject   to   the   result   of   the   said   Suit   is   therefore
unsustainable and is required to be quashed and set aside.
24) The   next   issue   is   as   to   what   rights   of   the   Promoter/
Developer is the Society entitled to.  This submission was sought to be
advanced in view of the directions of the Competent Authority in the
operative part of the impugned order, wherein, the direction is that the
Society would be entitled to deemed conveyance/assignment/rights of
the   Developer   i.e.  the   Respondent  No.1.     Insofar   as  the   rights  and
interest of which the Society would be entitled to deemed conveyance is
concerned,   there   can   be   no   gainsaying   that   the   Society   of   the   flat
purchasers or the condominium of the flat purchasers are entitled to the
right,   title   and   interest   of   the   Developer/Promoter   (see  Mazda
Construction Company and Ors. vs. Sultanabad Darshan CHS Ltd. and
Ors.
1
)  It was sought to be strenuously urged on behalf of the owners as
well as the Respondent No. 1 that since the Respondent No. 1 is a
monthly tenant, the Society at best would be entitled to the conveyance
1 2013(2) ALL MR 278

of the monthly tenancy.  Since the agreement with the flat purchasers
can  be said to be determinative  as  to what the  Society  of  the  flat
purchasers would be entitled to, it would be apposite to refer to the
recital and the relevant clause 25 of the said agreement, which was part
of the record before the Competent Authority, which read thus:
“AND WHEREAS the Flat­holder has taken inspection from the
Builders of the aforesaid Agreement for Lease dated 8th March
1975. AND WHEREAS the certificate of Title issued by the
Builders Advocate has been inspected by the Flat­holder (a
copy  whereof   is   annexed   as   Ex.A   to   this   Agreement)  AND
WHEREAS   the   Builders   will   be   selling   the   flats   and   other
spaces in the said building named “Farhat Apartments' as also
the open car­parking space, as also the garages (if constructed)
on what is known as “Ownership Basis” with a view ultimately
that   the   owners   of   all   the   flats   and   other   spaces   in   such
Building   and   the   Garages   (if   constructed)   and   open   carparking
spaces in the compound should form themselves into a
Co­operative Society duly registered under the Maharashtra
Co­operative   Society's   Act   1960   (or   ultimately   become
members of such Society) or they should incorporate a Limited
Company with themselves as share holders or that they should
form   a   condominium   (Association)   as   contemplated   by  the
Maharashtra Apartment Ownership Act (hereinafter referred to
as “the MAO Act”) and upon the owners of all flats, other
spaces in said Building and the open car­parking spaces and
garages (if constructed) in the compound paying in full all
their   respective   dues   payable   to   the   Builders   and   strictly
complying with all the terms and conditions of their respective
agreements   with   the   Builders   (in   a   form   similar   to   this
Agreement) the Builders shall obtain directly from the Lessors
(and if necessary, themselves join in) in necessary Lease in
favour of such Co­operative Society or a Limited Company or
Association (as the case may be) AND WHEREAS the Flatholder
has agreed to acquire from the Builders Flat No. 3 on
the ground floor of the building named “Farhat Apartments”
and compound (hereinafter referred to as “the said premises”)
with     notice   of   the   terms   and   conditions   and   provisions
contained   in   the   documents   referred   to   hereinabove   and
subject to the terms and conditions hereinafter contained.
…..............
25. On the completion of the said building and garages (if

any) and on receipt of by the Builders of the full payment of all
the amounts due and payable to them by all the Flatholders of
the said building and car parking spaces and garages (if any),
the builders shall co­operate with the Flat holder in forming,
registering or incorporating a Co­operative Society or Limtied
Company or any Association the rights of members of the Cooperative
  Society   or   of   the   Limited   Company   or   of   the
Association as the case may be, being subject to the rights of
the   Builders   under   this   Agreement   and   the   Lease   to   be
executed in pursuance hereof, when the Co­operative Society
or   Limited   Company   or   Association   is   registered   or
incorporated   or   formed,   as   the   case   may   be,   and   all   the
amounts due and payable to the Builders in respect of all the
flats and other portions of the said building and the garages (if
constructed)   and   car   parking   spaces   are   paid   in   full   as
aforesaid,   the   Builders   shall   obtain   and/or   execute   the
necessary Lease of the said land and building in favour of such
Co­operative Society or Limited Company or Association, as
the case may be.”
25) Hence, the Respondent No. 1, who is the Developer has an
Agreement to Lease dated 8th  March, 1975 from the owners, and the
lease rent is Rs.1750/­ per month to be payable to the owners is also
mentioned in the said flat purchasers' agreement.  The obligation of the
Respondent No. 1 to see to it that the lease is granted to the Society of
the flat purchasers is also part of the said flat purchasers agreement.  It
is on account of the default committed by the Respondent No. 1 to
convey its rights that the cause for filing the application for deemed
conveyance arose.
26) Insofar   as   the   aforesaid   issue   is   concerned,   certain
antecedent facts, which have already been mentioned in the earlier part
of this Judgment are required to be revisited.  The fact that the owners

had obtained IOD and commencement certificate from the MCGM on 7th
March, 1975, which commencement certificate was revalidated from
time to time upto the year 1979.  To facilitate the construction of the
building,   the   owners   had   constituted   the   partnership   firm   i.e.   the
Respondent No. 1, of which one of the partners was a member of the
owners family.   It is also pertinent to note that the flat purchasers
agreements have been signed by the other family members i.e. the
Respondent Nos. 3, 6 and 7 either singly or jointly representing the
Respondent No. 1 M/s. Malkani Enterprises i.e. the Developer.  The fact
that the owners and the Respondent No. 1 were represented by the
same   Advocate   in   the   deemed   conveyance   proceedings   and   that   a
separate   Advocate   started   to   appear   for   the   Respondent   No.  1  just
before the notice of termination of lease was issued are facts which
cannot be lost sight of.  The aforesaid facts therefore disclose that the
Respondent Nos. 1 to 11 have common interest and it is pursuant to the
said common interest that the common design appears to be to frustrate
the   proceedings   for   the   grant   of   deemed   conveyance,   which   are
initiated by the Society.  As regards the filing of the T. E. & R. Suit No.
4/4 of 2013 is concerned, this Court has already recorded findings as
regards the collusive nature of the Suit.  No doubt, the Society would be
entitled to the right, title and interest, which the Developer/Promoter
has.   In the instant case, the Respondent No. 1 is undisputedly the

Developer,   though   the   owners   sought   to   question   the   fact   that   the
Respondent No. 1 is a family firm, but could not do so with any deal of
conviction.     In   the   light   of   the   clinching   documentary   evidence   on
record, there is no escape for the owners from the acceptance of the fact
that it is the Respondent No. 1 who is the Developer.  The Respondent
No. 1, as the record discloses, has an Agreement to Lease dated 8th
March, 1975 in its favour.  The Society, in terms of the provisions of the
MOFA, would therefore be entitled to the assignment of the lease, to
which the Respondent No. 1 would be entitled to from the owners.  In
my view, in the teeth of the clause in the agreement, which has been
extracted hereinabove, the submissions urged on behalf of the owners
and the Respondent No. 1 that the Society would only be entitled to
monthly tenancy and that the order passed by the Competent Authority
is vague in respect of the claim of deemed conveyance would have to be
rejected.
27) In the said context, it would be gainful to refer to the
Judgment of a learned Single Judge  of  this court in  the  matter  of
Ramniklal Tulsidas Kotak and Ors. vs. M/s. Varsha Builders and Ors.2 Para 16 and 17 of the said Judgment are relevant and are reproduced
hereinunder:
2 AIR 1992 Bombay 62

“16. It emerges from the scheme of the said Act read with the
definition of the expression “Promoter” contained in S. 2(c) of
the   said   Act   and   Rule   5   of   the   statutory   form   referred   to
hereinabove   that   the   Promoter   must   fall   in   either   of   the
following categories:­
   (1) The promoter may be the owner of freehold land;  
or
   (2) The   Promoter   may   be   the   lessee   of   the   land
intended to be developed, provided the indenture of lease
authorities the promoter to construct flats and sell the same
on ownership basis;
   (3) The promoter may have entered into an agreement
to purchase the land from the lawful owner thereof.  In such
a case, the Vendor of the promoter must have a valid title to
the said land and the agreement must not be terminable by
the Vendor.
   (4) The Promoter is an agent of the owner or of the
authorised lessee duly entitled to construct and dispose of
flats   on   ownership   basis.     In   such   a   case,   the
promoter/developer must make the owner of freehold or
leasehold interest as Confirming Party to the agreement of
sale of flat on ownership basis so as to bind the owner with
all   the   terms,   conditions   and   covenants   of   third   party
agreement.  When the Promoter falls in 3rd or 4th category,
the promoter has no title to the land in the sense in which
the word “title” is normally under stood in the property law.
To this limited  extent  the expression “promoter's  title” is
used in the Maharashtra Ownership Flats Act 1963 in the
special wider sense.
 17. It is clear from the scheme of the Act that the promoter
need not necessarily be the absolute owner of the land or a
long­term lessee thereof.  At the same time, it is imperative that
the   promoter   must   have   sufficient   entitlement   and   right   to
construct on the land and dispose of the flats on ownership
basis so as to bind the owner of the freehold and the leasehold
interest.  If the promoter is not the owner of the land or is not
the duly authorised lessee of the property but is developing the
same as a mere developer under an agreement, the owner or
the authorised lessee must necessarily be made a Confirming
Party to the transaction in respect of agreement to sell the flat
with each of the flat buyers so as to bind the owner or the
lessee with the transaction and not to leave the flat buyer in a

lurch later on.  If the promoter is developing the land as agent
of the owner, such agency must be irrevocable.   The above
construction follows by necessary implication and is supported
by the scheme of the Act and its objects to protect the flat
purchasers and check the malpractices.”
The learned Single Judge in the Judgment (supra), having regard
to the scheme and the object of the Act, which is to protect the flat
purchasers   and   check   the   malpractices,   has   interpreted   the   term
“Promoter” as appearing in the Act.  The said Judgment can also be a
guiding light insofar as the instant case is concerned, especially having
regard to the fact that in the instant case the owners as well as the
Developer i.e. the Respondent No. 1 seem to be interested in seeing to it
that conveyance is not granted to the Society.
28) There is one more dimension to the matter.  As indicated
above, it is the owners, who had obtained the IOD and commencement
certificate   from   the   MCGM   and   it   is   through   the   medium   of   the
Respondent   No.   1   that   they   have   commenced   and   completed   the
construction.  Therefore, in terms of Section 2(c) of the MOFA, which
takes within its sweep the person who has caused the construction to be
the Promoter, the owners can be said to be the Promoters, as they have
admittedly caused the construction.   It is therefore their obligation to
see to it that the Society is conveyed what it is entitled to in terms of the
agreement entered into with the flat purchasers by the Respondent No.
1, which, in the instant case is the right to get a lease in its favour.  In

my view, since the owners having abdicated their obligation under the
MOFA   of   conveying   the   property   to   the   Society,   the   Competent
Authority has rightly intervened in the matter by passing the impugned
order.     In   my   view,   the   impugned   order   granting   the   deemed
conveyance has therefore to be construed in the context of the rights
the Developer had i.e. the right to get a lease from the owners.  Hence,
the impugned order cannot be faulted with on the ground that the
operative part of the order is vague or ambiguous.
29) The submission urged on behalf of the owners that though
the Respondent No. 2 had expired, his heirs were not brought on record
and since the proceedings were continued against a dead person, the
order is a nullity, the said submission can be said to epitomize the
manner in which the owners want to stall the grant of conveyance of
the property to the Society.  As indicated above, the Respondent No. 1 is
admittedly the Developer and the Respondent Nos. 3 to 11 are the heirs
of   the   original   owner   Khatijabai,   the   Respondent   No.   1   is   a   firm
belonging to the family.  The Respondent No. 2 was a partner of the said
firm, assuming that the heirs of the Respondent No.2 are not brought on
record, in my view, it would not impact the proceedings and the order
passed by the Competent Authority, as the firm as well as the owners
were all before the Competent Authority and have participated in the
proceedings.  The said submission can be said to be the final gambit of

the owners.  In my view, the said submission cannot be entertained and
has to be rejected.
30) For the reasons aforestated, the impugned order insofar as
it makes the grant of deemed conveyance subject to the final decision of
the Suit being T. E. & R. Suit No. 4/4 of 2013 would have to be quashed
and set aside and is accordingly quashed and set aside to the said
extent.  The Petitioner in Writ Petition No. 9116 of 2013 i.e. the Society
would   therefore   be   entitled   to   deemed   conveyance   without   any
conditions.   Resultantly, Writ Petition No. 9116 of 2013 would stand
allowed, Rule is accordingly made absolute in the said Petition in the
aforesaid   terms.     Insofar   as   Writ   Petition   No.   10356   of   2013   is
concerned, the same would stand dismissed.   Rule would accordingly
stand   discharged   in   the   said   Petition.     The   parties   to   bear   their
respective costs of the Petitions.
(R. M. SAVANT, J.)
31) At   this   stage,   the   learned   Counsel   appearing   for   the
Petitioners in Writ Petition No. 10356 of 2013 i.e. the owners prays for
continuation   of   the   order   dated   13th  January,   2014,   which   was   in
operation pending consideration of the above Petitions.   By the said
order, it was directed that the order passed by the Competent Authority

dated 6th  May, 2013 was not to be acted upon.  The learned Counsel
appearing for the Petitioner in Writ Petition No. 9116 of 2013 opposes
the application.   In the facts and circumstances of the case, the said
order dated 13th January, 2014 is continued for a period of six weeks
from date.
23rd September, 2014                      (R. M. SAVANT, J.)

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