Bombay High Court
SATELLITE GARDEN I CO OP HSG SOC LTDversusSTATE OF MAHARASHTRA THR THE MINISTRY OF HOUSING AND ORS
- Decided
- Disposal
- Disposed Off
Holding
The court held that land division must be based on the original layout plan of 10 March 2005, using BUA figures excluding TDR, and that the societies' land entitlements crystallise at the statutory deadline, rendering the earlier limited conveyance orders invalid.
Summary
The Bombay High Court examined three writ petitions challenging the manner in which the Competent Authority had granted deemed conveyance of land to four cooperative housing societies in a multi‑building layout where the developer had used varying amounts of base FSI and transferred TDR. The petitioners argued that land should be divided proportionately based on the built‑up area actually utilised, that the earlier orders granting only plinth areas were arbitrary, and that the developer’s revision of plans and loading of TDR should not prejudice the societies whose buildings were completed earlier. The Court held that the land‑division must be based on the layout plan dated 10 March 2005, ignoring later revisions that incorporated TDR, and that the entitlement of each society crystallises at the expiry of the statutory period under Sections 10 and 11 of the Maharashtra Ownership Flats Act. Consequently, the orders granting limited conveyance were set aside and the matter remanded for fresh adjudication using a new architect’s certificate. The decision reinforces the principle of freezing land entitlement and the statutory duty of developers to convey ownership to flat‑purchasers.
Issues considered
- The appropriate basis for proportionate land division among societies in a layout where different buildings have used base FSI and TDR.
- Whether the Competent Authority can deviate from the flat‑purchase agreement and grant ownership conveyance despite contractual clauses.
- Whether the concept of freezing/crystallisation of land entitlement under Sections 10 and 11 of MOFA applies to prevent dilution of rights by later plan revisions.
- The validity of orders granting only plinth and appurtenant areas in cases involving TDR.
- The binding effect, if any, of the Government Resolution dated 22 June 2018 on the Competent Authority’s discretion.
Legislation cited
Subjects
- deemed conveyance
- proportionate land division
- transferable development rights
- floor space index
- cooperative housing societies
- layout development
- land entitlement freezing
- Maharashtra Ownership Flats Act
Judgment
Neeta Sawant WP 1128 of 2026 and group
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.1128 OF 2026
Satellite Garden I Cooperative Housing Society ...Petitioner
Ltd.
V/s.
State of Maharashtra through Ministry of ...Respondents
Housing and Ors.
WITH
WRIT PETITION (ST.) NO. 1629 OF 2026
Satellite Tower Cooperative Housing Society ...Petitioner
Ltd.
V/s.
District Deputy Registrar of Co-operative ...Respondents
Societies, Mumbai City (4) and Ors.
WITH
WRIT PETITION (ST.) NO. 1632 OF 2026
Sadguru Complex 1 (AB) Cooperative Housing ...Petitioner
Society Ltd.
V/s.
District Deputy Registrar of Co-operative ...Respondents
Societies, Mumbai City (4) and Ors.
________________
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Dr. Milind Sathe, Advocate General with Mr. A.C. Bhadang, Ms. Sulbha
Chipade, Mr. P.V. Nelson Rajan, Ms. Savina Crasto, AGPs for Respondent-
State.
Mr. Pravin Samdani, Senior Advocate, Amicus Curiae.
Mr. G. S. Godbole, Senior Advocate, Amicus Curiae.
Mr. Naushad Engineer, Senior Advocate, Amicus Curiae.
Mr. Mayur Khandeparkar, Amicus Curiae.
Mr. Karl Tamboly, Amicus Curiae.
Mr. Y.R. Mishra with Mr. Upendra Lokegaonkar and Mr. Sachidanand T.
Singh for Petitioner in WP/1128/2026 and for Respondent No.22 in
WPST/1629/2026 and for Respondent No.13 in WPST/1632/2026.
Mr. Rajan Kakkara for Petitioner in WPST/1629/2026 and
WPST/1632/2026.
Mr. Tushad Kakalia with Mr. Sahil A. Pandire i/b Mr. Dinesh Shinde for
Respondent No.16 in WP/1128/2026 and for Respondent No. 12 in
WPST/1629/2026.
Mr. J.K. Shah with Ms. Namrata Thakur, Ms. Samiksha and Ms. Pooja
Shah i/b RJ Law for Respondent No.3 in WP/1128/2026.
________________
CORAM: SANDEEP V. MARNE, J.
RESERVED ON: 05 AUGUST 2026
PRONOUNCED ON: 16 SEPTEMBER 2026
Judgment:
PROLOGUE
“He is not a full man who does not own a piece of land.”
1) The above ancient proverb underscores the importance of
ownership of land and applies befittingly to the situation of denial of
title in the land to the home buyers in multi-storey buildings. The
organisations of flat purchasers struggle to secure ownership of the land
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on which their buildings are constructed. The developer, who constructs
the building, treats the land as his own for eternity with the hope of
milking the future development potential and tells the home buyers
emphatically that what is sold to them is just the superstructure and not
the rights in the land, which would remain the property of the developer.
Noting this tendency on the part of such errant developers, the law is
required to extend its long arm to reach out to them by ensuring that the
ownership in the land is transferred in favour of the organisation of flat
purchasers. While the issues relating to transfer of ownership in the land
to the housing societies of a single building are largely sorted out, the
difficulties in land division amongst the societies of multiple buildings in
a layout still persist.
2) Rather than living in standalone buildings, home buyers
prefer to live in gated communities providing integrated infrastructure,
superior amenities, better security, etc. Home buyers prefer community
living fostering an active social environment with shared common spaces
and organised community events. A layout development involving
construction of multiple buildings on a comparatively larger piece of
land enables the developers to provide far better amenities to the
residents as compared to standalone buildings. Therefore, by and large,
the homes in the gated communities demand better prices and higher
appreciation. However, when it comes to ensuring that the developer
sticks to the disclosed plan and conveys the due land to organisations
formed by each building, the layout development takes a beating as
compared to standalone buildings. In standalone buildings, it is much
easier to keep a tab on activities of the developer who usually quits after
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completion of construction and conveyance of the land also does not
pose much difficulty. However, in a layout development, inability of the
flat purchasers to keep vigil on the activities of the developer results in
additional construction being put up than what was originally disclosed.
More importantly, sharing of the layout land amongst organisations
formed by various buildings in the layout gives rise to complications.
3) It is this intricate issue of land division amongst the
organisations formed by multiple buildings in a layout, which this Court
is tasked upon to decide in these Petitions. The issue of conveyance of
proportionate land to multiple organisations of flat purchasers in a
layout development is of seminal importance, giving rise to several
litigations. How to share the land in a layout by housing societies many
times becomes a hotbed of controversy, particularly on account of myriad
ways of exploitation of development potential in the layout land as well
as permissibility to import development potential of another
unconnected land and load the same in the layout land. Many times,
apple to apple comparison becomes impossible. The present Petitions
pose a similar quandary, which I proceed to resolve.
4) Noting the mischief played by the promoters and developers
in avoiding conveyance of the land to the organisation of flat purchasers,
the concept of deemed conveyance has been introduced, under which the
organisation of flat purchasers can secure title in respect of the land
without cooperation from the land owner or the developer/promoter. As
observed above, in a case involving construction of a single building on a
plot of land, conveyance of land in favour of organisation of flat
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purchasers therein does not pose much difficulty as the entire land can
easily be conveyed. The difficulty arises where multiple buildings are
constructed in a layout. The promoters take unduly long time in
completion of layout development. Quite often the delay is deliberate
and aimed at milking the additional FSI made available with passage of
time. The organisation of flat purchasers in respect of the first building
constructed in the layout need not await completion of the entire layout
development and the law in this regard is now well-settled. The right of
such organisation of flat purchasers to seek conveyance of proportionate
share in the land is also well-recognised. The difficulty however arises as
to how much land can be conveyed to the organisation in respect of the
completed building.
5) Even in respect of the layouts where the development is
complete, disputes often arise about the manner in which the land in the
layout is to be shared. Here again, when all buildings in the layout are
constructed with same the FSI, no difficulty is posed as the land as well
as common amenities, such are Recreational Ground (RG), can be divided
proportionate to the built-up area (BUA) utilised in construction of each
building. The difficulty arises where the buildings in the layout are
constructed either with different FSI or where BUA arising out of
Transferrable Development Rights (TDR) is utilised in construction of
some of the buildings. There are cases involving mixed development
where one building is constructed with the normal base FSI whereas
another building is constructed by use of incentive FSI such as IT Park
FSI, hospitality FSI etc. Difficulties also arise where the buildings get
constructed in different FSI regimes where buildings constructed later, in
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the new FSI regime, often tend to consume more BUA than their former
counterparts.
6) Thus, the difficulty in proportionate land division arises
where buildings in the layout are not constructed using same parameters
and there is imbalance while undertaking the exercise of proportionate
land division. Through this judgment, it is proposed to resolve the
difficulties in proportionate land division for grant of conveyance in a
layout development. While resolving the conundrum posed in the
present three Petitions, general principles governing grant of conveyance
by proportionate land division are also proposed to be discussed.
7) To understand the controversy at hand, a very brief
narration of factual background as a prelude to the judgment would be
necessary.
FACTS
8) The land admeasuring 55,696.70 sq.m. located at A.K. Vaidya
Marg, Goregaon (E), Mumbai- 400063 was owned by Kadam family.
Development rights in respect of the larger land admeasuring 55,696.7
sq.m. were granted by the landowners in favour of BPM Industries, now
named as Satellite Developers Ltd. (developer) in the year 1995-96. An
exemption under the provisions of Urban Land (Ceiling and Regulation)
Act, 1976 (ULC Act) was obtained and the land was apparently
subdivided into Sub-Plot Nos. A, B, C, and D. After subdivision, Sub-Plot
No. A was apparently located within CTS No.620A, 1/A4(Pt), 644 (Pt), 653
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(Pt) of revenue village Malad (East), Mumbai Suburban District. The
developer undertook development of Sub-Plot No. A admeasuring
16,855.47 sq.m. and Commencement Certificate for construction of
Building No.1 comprising of 196 flats and 2 shops with amenities was
sanctioned by the Planning Authority. The developer entered into flat
purchase agreements for sale of flats in Building No.1 with the
purchasers. The flat purchasers formed and registered Satellite Garden I
Co-operative Housing Society Limited in respect of Building No.1 on 11
October 2002.
9) After completion of construction of Building No.1, in which
Satellite Garden I CHSL was formed, the Developer applied for
amalgamation of the plots in the larger property and the sub-plots were
apparently realigned under which the area of Sub-Plot A got increased to
21,807.18 sq.m. The original promoter failed to convey the land in favour
of Satellite Garden I CHSL and instead executed a Development
Agreement dated 17 April 2003 with Shree Swastik Developers, who
applied for further permissions in respect of the development to be
caried out in sub-plot A. During 2003 to 2006, the new developer
constructed two buildings viz. ‘AB’ and ‘CD’ on Sub-plot No. A. The flat
purchasers of AB and CD buildings formed their own respective
cooperative societies. In respect of ‘AB’ building, Sadguru Complex 1 (AB)
CHSL was formed. Similarly, in respect of ‘CD’ building, Sadguru
Complex 1 (CD) CHSL has been formed.
10) On 23 April 2010, Satellite Garden-I CHSL filed Suit No.1002
of 2010 before the City Civil Court seeking conveyance of land forming
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part of old Sub-plot A admeasuring 16855.47 sq.m. The suit is still
pending. In the meantime, the developer has also constructed the fourth
building in the layout named ‘Satellite Tower’ and the flat purchasers
therein have formed Satellite Tower CHSL. It appears that the fifth
building has also been envisaged under the sanctioned plans,
construction of which is yet to be undertaken by the developers.
11) Thus, there are total 5 buildings sanctioned in realigned
Sub-plot No. A, total area of which is approximately 21,807.18 sq.m. As
per the last sanctioned plan (OC Plan dated 9 July 2010), the position of
the 5 buildings sanctioned in the layout appears to be as under:
Building No. Name of Society BUA (sq.m.)
A-1 Satellite Garden I CHSL 11186.41
A-2 Sadguru Complex 1 (AB) CHSL 3936.31
A-3 Not constructed 328.74
A-4 Sadguru Complex 1 (CD) CHSL 3917.76
A-5 Satellite Tower CHSL 20728.06
12) As observed above, Satellite Garden I CHSL has already filed
S.C. Suit no. 1002 of 2010 before the City Civil Court seeking conveyance
of original Sub-plot A (before realignment) admeasuring 16855.47 sq.m.
Thus, Satellite Garden I CHSL is aggrieved by action of Developer of
amalgamating the plots and increasing area of Sub-Plot No. A from
16855.47 sq.m. to 21807.18 sq.m. It wants whole of the land admeasuring
16855.47 sq.m. conveyed to it. Satellite Garden I CHSL believes that the
entire development potential of old Sub-Plot No. A was exploited in
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construction of its buildings and by illegal realignment of the Sub-plot,
further construction is carried out by the developer.
13) While Satellite Garden I CHSL has filed suit for conveyance
of land, the Satellite Tower CHSL filed Application No. 138 of 2023 under
Section 11 of Maharashtra Ownership Flats (Regulation of the Promotion
of Construction, Sale, Management and Transfer) Act, 1963, seeking
proportionate deemed conveyance of land in its name. Similarly, Sadguru
Complex 1 (AB) CHSL filed Application No. 22 of 2025 seeking deemed
conveyance of the proportionate land in its name. Also, Sadguru
Complex 1 (CD) CHSL filed Application No.153 of 2025 seeking unilateral
deemed conveyance of proportionate land and the building in its favour.
14) Application No. 138 of 2023 filed by Satellite Tower CHSL
came to be decided by order dated 16 May 2024 and the Competent
Authority has conveyed to it only land admeasuring 4864.21 sq.m. being
the plinth area. Thus, what is conveyed in favour of Satellite Tower CHSL
by the Competent Authority is only the land covering the plinth of the
building admeasuring 4864.21 sq.m.
15) Application No.22 of 2025 filed by Sadguru Complex 1 (AB)
CHSL is decided by the Competent Authority by order dated 6 March
2025, conveying to it only land admeasuring 643.81 sq.m. out of Sub-Plot
A, which appears to be less than the plinth of the building.
16) Application No. 153 of 2025 filed by Sadguru Complex 1 (CD)
CHSL came to be decided by the Competent Authority on 31 October
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2025, conveying the land admeasuring 1814.03 sq.m. and proportionate
share in the RG area of 320.12 sq.m. aggregating total area of 2134.15
sq.m. in addition to road setback area advantage.
17) In the above manner, the Competent Authority has adopted
different parameters for granting unilateral deemed conveyance in
respect of the three societies. The Competent Authority has denied share
in the land proportionate to BUA utilised for 2 societies (Sadguru
Complex 1 (AB) CHSL and Satellite Tower CHSL) and has apparently
conveyed to them only the plinth area of their respective buildings or
even lesser area than that in the case of Sadguru Complex 1 (AB) CHSL.
On the other hand, Competent Authority has granted proportionate
share in the land in favour of Sadguru Complex 1 (CD) CHSL. The fourth
society (Satellite Garden I CHSL) has filed suit for deemed conveyance in
the City Civil Court, which is pending. The fifth building in the layout is
yet to be constructed.
18) In view of the above developments, the present 3 Petitions
have been filed as under:
i. Writ Petition No. 1128 of 2026 is filed by Satellite Garden I
CHSL for challenging order dated 31 October 2025 passed by the
Competent Authority in Application No. 153 of 2025 filed by
Sadguru Complex 1 (CD) CHSL. In that Petition, Satellite Garden I
CHSL is aggrieved by conveyance of land proportionate to the BUA
utilised in construction of Sadguru Complex 1 (CD) building.
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ii. Writ Petition (Stamp) No. 1632 of 2026 is filed by Sadguru
Complex 1 (AB) CHSL, challenging the order dated 6 March 2025
passed by the Competent Authority in Application No. 22 of 2025
to the extent it conveys land lesser than even the plinth area and
denies conveyance of land proportionate to the BUA utilised in
construction of society’s building.
iii. Writ Petition (Stamp) No. 1629 of 2026 is filed by Satellite
Tower CHSL, challenging order dated 16 May 2024 passed by the
Competent Authority in Application No.138 of 2023 to the extent
it conveys only the plinth area and denies conveyance of land
proportionate to BUA utilised in construction of society’s building.
THE CONUNDRUM IN THE PRESENT CASE
19) Thus, in respect of the 4 buildings already constructed and 1
building yet to be constructed in the layout development of Sub-Plot A,
conveyance has been granted in respect of 3 buildings by the Competent
Authority, a Suit for conveyance of one building is pending and the 5 th
building is yet to be constructed. Though Competent Authority has
granted conveyance to the 3 buildings, it has not applied uniform
yardstick for deciding entitlements of even those 3 buildings in respect
of the land in the layout. As observed above, Sadguru Complex 1 (CD)
CHSL has received conveyance of land proportionate to BUA utilised in
its construction, whereas Satellite Tower CHSL has received conveyance
of only plinth land. It appears that Sadguru Complex 1 (AB) CHSL has
not even received conveyance of plinth area as what is conveyed to it is
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only land admeasuring 643.81 sq.m. though the building is constructed
on plinth of 959.69 sq.m.
20) The following table reflects the lack of uniform approach
and disparity in the matter of conveyance to the four societies:
Society Name BUA Land conveyed
consumed (sq.m.)
(sq.m.)
Satellite Garden 11186.41 Nothing Conveyed yet.
I CHSL Suit pending but society has demanded
conveyance of 16855.47 sq.m., which is the area
of original Sub-Plot A
Sadguru 3936.31 643.81
Complex 1 (AB) This land is less than plinth of the building, i.e.
CHSL 959.69 sq.m. and order does not indicate basis
for determining area of 643.81 sq.m.
Sadguru 3917.76 2134.15
Complex 1 (CD) By undertaking the exercise of determining BUA
CHSL proportionate to area utilised in construction of
building.
Satellite Tower 20728.06 4864.21
CHSL Which is the plinth area of the building
Building 5 328.74 --
(yet to be
constructed)
21) Ordinarily, this Court could have set aside the orders passed
in the case of Sadguru Complex 1 (AB) CHSL and Satellite Tower CHSL
and could have directed conveyance of land proportionate to BUA
utilised in construction of their buildings so that there could have been
uniformity in grant of deemed conveyance to all the three societies. Even
Satellite Garden I CHSL could have opted for land division proportionate
to BUA utilised in construction of its building by giving up demand for
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conveyance of entire original Sub-Plot No. A admeasuring 16855.47
sq.m. However, in peculiar facts of this case, this Court is unable to direct
that exercise. This is on account of loading of TDR in some of the
buildings. The TDR is not uniformly loaded and there is massive loading
of TDR in building of Satellite Tower CHSL. The position of loading of
TDR in 4 constructed buildings is as under:
Society Name Base BUA TDR Total BUA
(sq.m.) (sq.m.) (sq.m.)
Satellite Garden I CHSL 11186.41 0 11186.41
Sadguru Complex 1 3126.32 720 3936.31
(AB) CHSL
Sadguru Complex 1 830.92 3086.08 3917.76
(CD) CHSL
Satellite Tower CHSL 5778 14949.6 20728.06
Total 20921.65 39768.43
22) Considering the above position, if the principle of
subdivision of land proportionate to BUA used in construction of each
building is applied, Satellite Tower CHSL will receive maximum share of
the land since its total BUA is 20728.06 sq.m., which is more than 50 % of
total BUA used in the layout. Satellite Tower CHSL will thus own more
than 50 % of layout land though the base FSI for its construction was
only 5778 sq.m. (representing only 25% of base BUA). Thus, the building
with only 25% base BUA will walk away with more than 50% of the land
in the layout. This is how use of massive TDR of almost 3 times the base
FSI would give a windfall gain to Satellite Tower CHSL, which would
claim ownership of more than 50 percent of land in the layout. On the
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other hand, Satellite Garden I CHSL, for construction of which no TDR is
utilised, would be put in a disadvantageous position.
23) On the other hand, if the principle of conveyance of only
plinth area to each society is followed, the question as to who would own
the balance portion in the layout would still beg an answer. This is
because the plinths of the 4 buildings totally admeasure only 10797.23
sq.m., whereas total land available for subdivision is 21807.18 sq.m. Even
if balance area excluding plinths is to be proportionately owned by all
the buildings, again the difficulty of proportionate land division would
arise.
24) During the course of hearing of the present petitions, this
Court identified the above unique conundrum presented in the case and
has accordingly sought assistance from various learned counsel at the
bar requesting them to act as Amicus Curiae and present their views on
resolving this intricate issue of grant of conveyance in a layout plan.
25) Accordingly, this court requested Mr. Pravin Samdani,
learned Senior Advocate, Mr. Girish S. Godbole, learned Senior Advocate,
Mr. Naushad Engineer, learned Senior Advocate, Mr. Mayur
Khandeparkar, learned counsel, and Mr. Karl Tamboly, learned counsel to
act as Amicus Curiae and present their views for resolution of the
conundrum. Dr Milind Sathe, learned Advocate General, has also
presented the views on behalf of the State Government on the issue of
proportionate land division in a layout. In addition, I have also heard the
learned counsel appearing for the rival parties in the present Petitions. I
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proceed to briefly capture the broad submissions canvassed and the
suggestions made by the learned counsel.
SUBMISSIONS
Dr. Milind Sathe, The Advocate General
26) Dr. Sathe has taken me through the statutory scheme of
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963 (MOFA) and the
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction etc.) Rules, 1964 (MOF Rules). He submits that there is a
statutory duty on the promoter to form a cooperative society under
Section 10 of MOFA within the time prescribed under Rule 8 of MOF
Rules, which is 4 months from the date of purchase of flats required for
formation of society. That once the society is formed, under Section 11,
there is a statutory duty to convey promoter’s right, title and interest in
favour of the society within 4 months of its formation as per Rule 9 of
MOF Rules. He submits that sub-sections (2) to (5) are added to Section
11 by Maharashtra Act 4 of 2008 to enforce rights of organisation of flat
purchasers to obtain conveyance on failure of promoter to convey the
land.
27) Dr. Sathe then takes the Court through the Development
Control Regulations for Mumbai, 1991 (DCR 1991). He submits that
Regulation 32 provides for FSI and tenement density in residential,
commercial and industrial zones. That Regulation 33 provides for
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additional FSI in certain categories and Regulation 35 provides for
computation of FSI. Dr. Sathe submits that Regulation 34 of DCR 1991
introduced, for the first time, the concept of Transferable Development
Rights (TDR) which provides that the development potential of land
could be separated from the plot and the same was made available to the
landowner. That generation and utilisation of TDR is regulated under
Appendix VII. That clauses 1 to 9 of Appendix VII provided for
‘generation’ of TDR whereas clauses 10 to 19 provide for ‘utilisation’ of
TDR. That clause 14 provides that FSI of receiving plot may be allowed to
be exceeded by only 0.4 by availing TDR. That this clause was substituted
in 2007 by changing 0.4 to 0.8. That thus, by utilising the TDR, the
development potential of the plot was allowed to be increased by 0.4 in
1991 and 0.8 after 2007. That therefore for computing the plot potential,
the FSI would be base FSI and TDR permissible under Clause 14 of
Appendix VII/VIIA. He further submits that under DCR 33, additional FSI
is admissible in respect of various categories such as MHADA colonies
[DCR 33(5)], destroyed or burnt buildings [DCR 33(6)], cessed or
municipal or police buildings [DCR 33(7)], cluster development [DCR
33(9)], slums [DCR 33(10)] etc. He submits that under DCR 33(16), there
is incentive FSI granted for establishment of IT parks.
28) Dr. Sathe invites attention of this Court to Government
Resolution (GR) dated 22 June 2018 prescribing the procedure to be
followed for deciding applications for deemed conveyance. He submits
that under Para 2(C)(vi)(2) of the GR, there is provision for conveyance of
only plinth and appurtenant area where TDR is utilised in construction
of the building. Dr. Sathe however fairly concedes to the position that the
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GR does not assist in resolution of the conundrum of proportionate land
division created in present case and in various other cases of revision of
layout plans midway. He submits that GR is meant only for guidance of
the Competent Authority.
29) Dr. Sathe submits that the concept of proportionate land
division on a reasonable basis is judicially recognised and invites
attention of this court to judgment of Division bench of this Court in
Shree Siddharth Construction vs. Shree Saraswati Apartment CHS
Limited1, in which it is held that there can be subdivision of land
proportionate to FSI distribution in a reasonable manner.
30) Dr. Sathe thereafter has presented his views for resolving
the disputes relating to conveyance of proportionate land in the layout
in the following three scenarios/contingencies:
(a) The entire layout is developed ‘simultaneously’ under one
regime of DCR;
(b) The layout is developed ‘in phases’ under one regime of DCR;
(c) The layout is developed in phases ‘partly under regime of one
DCR and one layout developed under regime of another DCR’.
31) He submits that the critical date for consideration of
distribution of plot/land for conveyance between competing claims may
be reckoned depending upon facts of each case as follows:
a. The date of first sanction of the plans of a building.
1
Writ Petition No. 1439 of 2012 decided on 17 October 2013.
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b. The date on which the right of a building/society accrues in
terms of Section 11 of MOFA.
c. The date of subsequent plan/s.
d. Whether permissible TDR at the relevant time was utilized in
the plans would be a relevant consideration.
32) Dr. Sathe has suggested the process to be adopted for the
purpose of fair and legal distribution of land in reasonable manner for
conveyance to respective bodies of flat purchasers in various
contingencies and considering the GR dated 22 June 2018.
Mr. Pravin Samdani, Senior Advocate, amicus curiae
33) Mr. Samdani fairly concedes that in a layout development
where external FSI such as TDR is used or where mixed development is
undertaken, problems are created for conveyance of proportionate land
to the buildings constructed in such layout. He has submitted that
ideally mixed use should not be permitted in a layout development after
one of the buildings is already constructed. He submits that if mixed use
to be allowed in such case, the planning authority must first deduct the
land in respect of the building already constructed and then sanction the
FSI under the incentive scheme only for balance plot area, to avoid
imbalance. He has given suggestions in his Note to be followed for
undertaking conveyance in (i) cases involving use of TDR and (ii) cases
involving mixed development, which are discussed in the latter part of
the judgment.
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Mr. Girish S. Godbole, Senior Advocate, amicus curiae
34) Mr. Godbole has submitted that while dealing with an
application under Section 11(3) of MOFA, it may not be advisable for the
Competent Authority to go into the issue of informed consent or lack
thereof since the jurisdiction of Competent Authority under Section
11(3) of the Act is limited to issuance of a certificate certifying that the
society is entitled to have unilateral deemed conveyance in its favour. He
has given his views on different scenarios in his Note, which are
discussed in the latter part of the judgment.
35) Mr. Godbole has further submitted that while considering a
mixed development as contemplated under Regulation 33 of
Development Control and Promotion Regulations for Greater Mumbai,
2034 (DCPR 2034), this Court needs to lay down certain conditions that
a developer will be required to disclose in the plans submitted to the
authorities at the outset whether there is any possibility of usage of
extra TDR in such development. That in such cases, this Court may
devise a way to potentially freeze the quantum of potential of each
constructed building which needs to be conveyed to each society at the
time of each conveyance.
36) Mr. Godbole further submits that for the purpose of
determining what is land appurtenant, a useful reference can be made
to Regulation 41 of DCPR 2034 which defines open spaces within
building plot/layouts while granting conveyance of appurtenant areas.
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Mr. Naushad Engineer, Senior Advocate, amicus curiae
37) Mr. Engineer also has taken me through the statutory
scheme of MOFA and the MOF Rules. Adverting to the GR dated 22 June
2018, he has submitted that the GR was introduced to address the
practical difficulties which had arisen in cases of layout development,
particularly where multiple buildings are constructed on the same parcel
of land and question of apportionment of land for the purpose of deemed
conveyance had become contentious. That the GR seeks to provide a
workable mechanism for determining the extent of land to be conveyed
to each society in such layout projects.
38) Mr. Engineer further submits that since MOFA gives primacy
to representations made in the Agreement for Sale under Section 4, the
GR, even in the cases of layout development, where promoter is
constructing multiple buildings, cannot be said to have an absolute
operation. That the GR can be applied only in consonance with the
Agreement for Sale and the disclosures made thereunder, and not in
derogation thereof. He relies on the judgment of this Court in Indian
Finance Construction Co. Pvt. Ltd. and Anr. vs. State of Maharashtra
and Ors.2 He submits that in Rashesh CHS Ltd. v. State of Maharashtra
and Ors.3, this Court has held that GR cannot override the statute and
that it can only assist in implementation where ambiguity exists. That
GR is therefore only clarificatory in nature and enabling framework,
which cannot be read to displace the substantive rights flowing from
2
2024:BHC-AS:48565
3
Writ Petition No. 10961 of 2025 decided on 28 April 2026
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Agreement for Sale, sanctioned plans and statutory obligations under
MOFA.
39) Mr Engineer has thereafter given his suggestion for
resolving the issue involved in the present 3 petitions by presenting the
following table:
Sr. Building FSI BUA TDR Total BUA Plot Developm
No. Plinth (sq.m.) (sq.m.) (sq.m.) Area ent
(sq.m.) (sq.m.) Potential
(sq.m.)
1. Satellite Garden 4004.56 11186.41 0 11186.41 21807.18 20921.65
I CHSL (base FSI)
2. Sadguru 959.69 3126.32 720 3936.31
Complex 1 (AB) +
CHSL
18755
3. Sadguru 968.77 830.92 3086.08 3917.76
(TDR)
Complex 1 (CD)
CHSL
4. Satellite Tower 4864.21 5778 14949.6 20728.06
CHSL
5. Total 10797.23 20921.65 18755.68 39768.54 21807.18 39677.33
40) Mr Engineer submits that after applying the formula of
“[Base FSI utilised ÷ Total Base FSI on the Plot] x Plot Area”, the
respective societies would be entitled to following areas:
Satellite Garden I CHSL = 11659.88 sq.m.
Sadguru Complex 1 (AB) CHSL = 3258.64 sq.m.
Sadguru Complex 1 (CD) CHSL = 866.08 sq.m.
Satellite Tower CHSL = 6022.55 sq.m.
41) Mr. Engineer has submitted that if conveyance is granted
solely on the basis of base or inherent FSI, completely ignoring the TDR,
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then Sadguru Complex 1 (CD) CHSL would receive land lesser than its
plinth area. He has further submitted that the aforesaid illustration also
demonstrates the inherent inequity in adopting a “purely base FSI based
formula” in a TDR-loaded layout without regard to the actual
development consumed by each society, as is apparent from the example
of Sadguru Complex 1 (AB) CHSL and Sadguru Complex 1 (CD) CHSL.
That both these societies have been constructed at the same time
between 2003-2005 on a plot of land admeasuring 7,868.17 sq.m. and
that the structures of the two societies are identical, as both the societies
consist of two wings of ground+8 floors comprising a total of 64 flats
each, and that the total built up area of both the societies is also almost
identical. That, however, Swastik Developers used TDR of only 720 sq.m.
for Sadguru Complex 1 (AB) CHSL and TDR of 3086.08 sq.m. on Sadguru
Complex 1 (CD) CHSL. Thus, even though the two societies are virtually
identical, just because the promoter has utilized the TDR unequally,
Sadguru Complex 1 (AB) CHSL would get conveyance of an area of almost
4 times more than Sadguru Complex 1 (CD) CHSL as can be seen from
the following:
Sadguru Complex 1 (AB) CHSL = (3,126.32/3,957.24) × 7,868.17 = 6216.07 sq.m.
Sadguru Complex 1 (CD) CHSL = (830.92/3,957.24) × 7,868.17=1652.11 sq.m.
He submits that such a result would be arbitrary and inequitable.
42) Mr. Engineer has further submitted another illustration
where there is a plot of land admeasuring 10000 sq.m. having base FSI of
10000 sq.m. and the developer has loaded TDR of 10000 sq.m. on that
land. The developer then constructs two identical structures, A and B of
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10000 sq.m. each, where Structure A is constructed using inherent FSI
and Structure B is constructed using TDR. In that case, applying the
aforesaid formula, the entire land would have to be conveyed to
Structure A, and Structure B would get nothing at all, which he submits
is not the statutory intention and, in any case, is not statutorily
permissible.
43) Mr. Engineer has therefore suggested that clause 2 (C) (vi)
(2) of the GR cannot be departed from in the manner suggested, as the
same would produce anomalous results. He has therefore submitted that
completely ignoring the TDR cannot be a solution while undertaking
proportionate land division.
44) Mr. Engineer has further pointed out 2 scenarios in layout
development as under:
a. Whether, in a case where TDR is loaded and the same is
disclosed to the flat purchasers in the Agreement for Sale, the land
can be conveyed proportionately on the basis of the total BUA
utilized by each society; and
b. Where a promoter starts development of a subsequent building
by loading TDR which is not disclosed to the flat purchasers of the
first building, then can the land be conveyed proportionately based
on the total BUA utilized by each society?
45) Mr. Engineer has submitted that in a case where TDR is
loaded and is disclosed to flat purchasers in Agreement for Sale, a
conveyance / deemed conveyance proportionate to total BUA in each
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building can be permitted. He refers to judgment of this Court in
Neelkanth Mansions and Infrastructure Pvt. Ltd. vs District Deputy
Registrar4. However, in a scenario where promoter starts development of
subsequent building by loading TDR which is not disclosed to flat
purchasers of first building, conveyance based on total BUA including
TDR cannot be sustained as the same would be contrary to statutory
scheme of MOFA, particularly Sections 7 and 7A. He concludes by
submitting that applicability of GR depends on whether TDR was
disclosed in Agreement for Sale and whether the proposed
apportionment is consistent with statutory scheme under MOFA. Mr.
Engineer has given suggestions by considering 3 options which are
discussed in the latter part of the judgment.
Mr. Mayur Khandeparkar, amicus curiae
46) Mr. Khandeparkar has submitted that given the volatility of
the situations and circumstances that exist concerning the manner and
mode of development, there cannot possibly be any straitjacket formula /
illustrative guidelines for conveyance of land in the layout and that the
aspect will have to be dealt with on a case-to-case basis. He has
submitted that the Competent Authority must look at the last sanctioned
plan for undertaking the exercise of proportionate land division. That
the only exception to this principle is where a civil court has passed an
order to the contrary, interdicting further development in the layout on
the basis of revised plans. He submits that there can be cases where
society formed first has never objected or has not taken steps against
4
Writ Petition No.3530 of 2026 decided on 25 June 2026.
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construction of the building in a society formed subsequently. Or there
can be cases where society formed first has specifically consented to
construction of building of subsequent society. That the result of both
illustrations is that the vested rights in favour of subsequently formed
society come into play and therefore, conveyance of proportionate land
has to be on the basis of the last sanctioned plan.
47) Mr. Khandeparkar has submitted that Competent Authority
cannot go into the issues of consent under Section 7 or 7A of MOFA and
that if any society has any dispute regarding construction carried out in
breach of MOFA, appropriate remedy would be to approach civil court to
restrain or restrict such construction. That where such construction is
not restricted, there is deemed consent and conveyance must take place
by taking into consideration BUA utilised in construction of all buildings
in the last sanctioned plan.
48) Mr. Khandeparkar has submitted that suggestion of freezing
first sanctioned plan would result in anomalous/dangerous situation
where a society whose building is constructed subsequently in the form
of revised sanctioned plan will never be able to seek any conveyance and
such limitations placed on rights of subsequent societies would be
contrary to the statutory scheme of MOFA.
49) Mr. Khandeparkar submits that buildings constructed
majorly/purely by utilising the TDR are no less than buildings
constructed by utilising inherent FSI. He relies on Regulation 30 Table 12
of DCPR 2034, which states that “permissible FSI” viz. development
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potential includes (i) Zonal (basic) FSI, (ii) Additional FSI on payment of
premium, and (iii) Admissible TDR. That therefore law does not create
any distinction between buildings constructed with inherent/base FSI
and TDR. That therefore such discrimination cannot be introduced while
granting conveyance to various buildings in the layout. That since
jurisdiction of Competent Authority is limited, it cannot go into
complicated issues of consent, legality of construction of building,
legality of use of additional FSI or TDR etc. That therefore the
Competent Authority must accept the last sanctioned plan for the
purpose of proportionate subdivision of layout land.
50) Mr. Khandeparkar further submits that there is another
reason why no straitjacket formula can be applied in matters of deemed
conveyance as under DCPR 2034, various types / modes of development
are now permissible as under:
a. Development concerning basic FSI + TDR (Reg.30, Table 12)
b. Incentive schemes such as (i) cluster re-development under Reg.
33(9), (ii) slum rehabilitation schemes under Reg.33(9)
c. Development concerning combined schemes such as those
permitted under (i) Clause 22 of Reg. 33(7), (ii) Clause 10 of Reg.
33(10), Clause 1 of Reg. 33(20)(B), etc.
d. Development concerning buildable reservations such as (i)
under Reg. 33(17)(C) for BMC and MHADA and (ii) under Reg.
33(17)(D) for SRA, etc. in which cases, the FSI consumed for
construction of the reservation is exempted, so long as the same is
handed over to the concerned authority.
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51) Mr. Khandeparkar has given two suggestions for purpose of
resolving the controversy involved in the facts and circumstances in the
present case, which are discussed in the latter part of the judgment.
Mr. Karl Tamboly, amicus curiae
52) Mr. Tamboly has assisted the Court by inviting its attention
to various judgments dealing with the issue involved in the present case.
By relying on judgment of Division Bench of this Court in Shree
Siddharth Construction (supra), he has submitted that the principle of
FSI distribution between the constructed properties existing on the land
for the purpose of conveyance in a reasonable manner can be followed.
That the Division Bench has held that such distinction between different
claimants on the basis of FSI consumed becomes necessary where land is
not allocated for each building for conveyance purposes. He submits that
in Marathon Next Gen Realty Ltd. vs. Competent Authority 5, a Single
Judge of this Court has held that Competent Authority has no
jurisdiction to adjudicate disputed facts and law, nor has power to decide
disputed interpretation of clauses in the Agreement for Sale. That in
ACME Enterprises vs. Deputy Registrar, Cooperative Societies 6, Single
Judge of this Court has held that Competent Authority cannot convey
more than what the promoter had agreed to convey under Section 4
agreement. That this Court has held that grant of conveyance in respect
of area proportionate to FSI consumed in construction of buildings
would take the matter in the arena of disputed questions as to title and
5
2015 (5) Mah LJ 318
6
2023 SCC OnLine Bom 1102
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that Competent Authority was neither competent nor equipped to
adjudicate the said issue. He submits that in subsequent judgment in
Marathon Era CHS Ltd. vs. Competent Authority & DDR 7, Single Judge
of this Court has dealt with the concept of appurtenant land and has held
that the same must go with the building and with the footprint land.
That it is further held that though additional FSI can be utilised, it
cannot be used in a manner in which it would reduce the promised or
assured facilities and amenities. That FSI already used in completed
building cannot be compromised in any manner. That utilisation of
further FSI cannot come at the cost of already consumed FSI. He then
invites the attention of this Court to Runwal Paradise vs. District
Deputy Registrar Cooperative Societies8, in which it is held that the
issue of entitlement to additional/unutilised FSI is outside the purview
of the Competent Authority and that purport of guidelines of GR dated
22 June 2018 is to grant conveyance of land required to sustain the
constructed structure along with proportionate areas in common
amenities. He also invites attention of this Court to the judgment in
Mahanagar Realty vs. Ganga Ishaniya CHS Ltd.9, in which this Court
has noted the scenario of share of constructed building in plot area
getting reduced with every revised sanctioned plan and the need to
freeze the FSI as per the sanctioned plan after some of the buildings in
the layout are constructed for the purpose of deemed conveyance. He
then invites attention of this Court to Gala Complex Premises
Cooperative Society Ltd. vs Gala Wood Works 10, in which it is held that
7
2024 SCC OnLine Bom 1115
8
2024 SCC OnLine Bom 2041
9
2026 SCC OnLine Bom 1445
10
2026 SCC OnLine Bom 2052
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when the building uses FSI of the entire plot, the land corresponding to
such construction must also be determined proportionately. That this
Court has held that promoter cannot retain land whose development
potential has already been used for constructing buildings and that
society must receive land corresponding to development potential
already used for its construction. He also invited attention of this court
to judgment in Nook CHS Ltd. vs Pyramid Developers 11, in which it is
held that the latter plan cannot be permitted to cut down a right which
had already arisen from the original arrangement unless the following 3
elements are clearly shown: (i) clear disclosure to purchasers, (ii)
informed consent, and (iii) proper sanctioned basis. That this Court has
held that latter sanctioned plan may be relevant but cannot supersede
statutory obligations owed at earlier stage. He submits that in Rashesh
CHSL (supra), this Court has held that while interpreting any provision
under MOFA, the Court must lean in favour of protecting the legitimate
rights of flat purchasers rather than permitting methods by which
conveyance is delayed. That the Court has also dealt with the concept of
appurtenant land in that judgment.
53) Mr. Tamboly also invites attention of this Court to the
judgment in Upvan Woodlands Cooperative Housing Society Limited vs.
M/s. Upvan Developers and Ors.12, in which it is held that it is not
necessary to await completion of development in the layout and society
in respect of completed building can seek conveyance of proportionate
land. That in Neelkanth Mansions (supra), this Court has held that where
11
2026 SCC OnLine Bom 2774
12
2026 SCC OnLine Bom 4723
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TDR is used for construction of all buildings in the layout, principle of
proportionate land division can be followed by taking into consideration
the BUA of each of the buildings.
54) Mr. Tamboly also relies on judgment of this Court in ACME
Enterprises and Anr. vs. Deputy Registrar Cooperative Societies (2) and
Ors.13 in support of his contention that principle of land-cutting can be
followed by conveying the due land to the building whose construction is
completed, so as to leave open all options to the developer to utilise the
balance land by loading the full development potential thereon.
SUBMISSIONS OF LEARNED COUNSEL APPEARING FOR RIVAL PARTIES IN
THREE PETITIONS
Mr. Y. R. Mishra for Satellite Garden I CHSL
55) Mr. Mishra submits that the Competent Authority could not
have exercised jurisdiction under Section 11 of MOFA in the facts and
circumstances of the present case where disputes are already sub judice
and Suit No. 1002 of 2010 is pending in which his client society has
sought conveyance of area of original sub-plot A admeasuring 16855.47
sq.m. That, Section 11 of MOFA confers only a limited and facilitative
jurisdiction and under the guise of that jurisdiction, Competent
Authority cannot go into complicated question of title. That the exercise
of “proportionate allocation” is beyond the jurisdiction of Competent
Authority. That Section 11(3) of MOFA permits conveyance only in
accordance with Agreement for Sale, and GR dated 22 June 2018 cannot
13
IA No. 4859 of 2025 decided on 4 November 2025
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be followed in derogation of covenants of Agreement for Sale and
provisions of MOFA. That the impugned order of deemed conveyance
granted in favour of Sadguru Complex 1 (CD) CHSL is in complete
disregard of injunction dated 29 January 2013, as confirmed by this Court
by judgment dated 16 April 2013 by which the developers were restrained
from creating third party rights in respect of the suit land. That by
executing deemed conveyance in favour of Sadguru Complex 1 (CD)
CHSL, Competent Authority has breached the said injunction order.
56) Mr. Mishra further submits that the impugned order of
Competent Authority ignores the fact that the entire development
potential of land admeasuring 16855.47 sq.m. of original sub-plot A was
already consumed and exhausted in construction of Satellite Garden I
CHSL. That therefore, construction of building of Sadguru Complex 1
(CD) CHSL itself is illegal. That there is suppression of material facts and
collusion with developers, and therefore, impugned order is rendered
illegal. That Petitioner alone is statutorily entitled to conveyance of
entire land admeasuring 16855.47 sq.m. and no right, title or interest
could lawfully pass on to Sadguru Complex 1 (CD) CHSL. That the
impugned order is vitiated by procedural irregularity and non-
application of mind.
57) In support of his contentions, Mr. Mishra relies on
judgments in Arunkumar H. Shah (HUF) vs. Avon Arcade Premises Co-
operative Housing Society Ltd.14, Mazda Construction Co. vs
14
2025 SCC OnLine SC 825
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Neeta Sawant WP 1128 of 2026 and group
Sultanabad Darshan Co-operative Housing Society Ltd. 15 and Zainul
Abedin Yusufali Massawala vs. Competent Authority16. Mr. Mishra also
opposes the petitions filed by Satellite Tower CHSL as well as Sadguru
Complex 1 (AB) CHSL, contending that grant of conveyance to those
societies is in the teeth of injunction order passed in the pending suit.
Mr. J.K. Shah for Sadguru Complex 1 (CD) CHSL
58) Mr. Shah submits that the Competent Authority has rightly
followed the principle of subdivision of land proportionate to BUA
utilised in construction of the building of his client society while passing
the impugned order. That pendency of Suit of Satellite Garden I CHSL
cannot come in the way of his client society securing due conveyance
under Section 11 of MOFA. That Occupation Certificate (OC) has been
granted in respect of his client society on 9 July 2010 and that the society
is entitled to conveyance of proportionate portion of land. That there are
64 member flat purchasers in his client society who have purchased the
flats for lawful and valuable consideration. That, the society has already
expended huge sums in securing conveyance and has purchased the
requisite stamp duty for conveyance of deeds. That no prejudice would
be caused to other societies if the conveyance is granted in favour of
Sadguru Complex 1 (CD) CHSL is allowed to sustain.
15
2012 SCC OnLine Bom 1226
16
2016 SCC OnLine Bom 6028
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Neeta Sawant WP 1128 of 2026 and group
Mr. Rajan Kakkara for Satellite Tower CHSL and Sadguru Complex 1 (AB)
CHSL
59) Mr. Kakkara has submitted that the Competent Authority
has erroneously restricted conveyance to only plinth area of land in
favour of his client society. That his client-societies are also entitled to
conveyance of land proportionate to BUA used in construction of those
buildings. That his client society has relied on certificates of architect
indicating proportionate land entitlement. Mere loading of TDR in
construction of a building becomes an irrelevant factor for deciding land
division. That mere use of TDR cannot reduce lawful entitlement of
society since building constructed with TDR ultimately amounts to
lawful construction as per the sanctioned plan. That pending suit and
injunction order therein do not justify denial of rights of his client
society. That his clients are also entitled to proportionate land division
in accordance with GR dated 22 June 2018 and conveyance cannot be
restricted only to plinth area used in construction of the buildings. That,
his client-societies are not parties to the suit and therefore their rights
had crystallised before passing of injunction order. That Competent
Authority already granted proportionate land in favor of Sadguru
Complex 1 (CD) CHSL and therefore restriction of plinth area selectively
imposed on his 2 client societies is clearly discriminatory. He accordingly
prays for setting aside the impugned order passed in the case of Sadguru
Complex 1 (AB) CHSL and Satellite Tower CHSL with direction for
conveyance of land proportionate to BUA utilised for construction of the
2 buildings.
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Neeta Sawant WP 1128 of 2026 and group
Mr. Tushad Kakalia for Developer - Satellite Developers Ltd.
60) Mr. Kakalia has submitted that the developer has never shied
away from obligations to convey the land in favour of the societies. He
submits that there are following seven structures on the land bearing
sub-plot A of the larger layout:
(a) Building No. A-1 of Satellite Garden I CHSL;
(b) Building No. A-2 of Sadguru Complex (A&B) CHSL;
(c) Building No. A-5 of Satellite Tower CHSL;
(d) Proposed Building on Plot No. A-3;
(e) Wagheshwari Temple;
(f) Electric sub-station; and
(g) Internal roads and Open Areas.
61) Mr. Kakalia has fairly placed on record copies of various
plans including last OC plans and based on the OC plans, he has
indicated utilisation of total permissible BUA of 40,343.28 sq.m. in
respect of each of the buildings as under:
Sub-plot A
Floor area considering base FSI: 21587 sq.m.
FSI credit available by TDR: 18755 sq.m.
Total permissible floor area: 40343.28 sq.m.
BUA with TDR
Building A-1: 11186.14 sq.m.; [Satellite Garden Phase I]
Building A-2: 3936.32 sq.m.; [Sadhguru AB]
Building A-3: 328.74 sq.m.; [Not completed]
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Building A-4: 3917.76 sq.m.; [Sadhguru CD]
Building A-5: 20728.06 sq.m.; [Satellite Tower]
62) Mr. Kakalia further submits that TDR has been used in
respect of 3 out of 5 sanctioned buildings as under:
TDR used in Building A-1: NIL
TDR used in Building A-2: 720 sq.m.
TDR used in Building A-3: NA
TDR used in Building A-4: 3086.08 sq.m.
TDR used in Building A-5: 14949.60 sq.m.
63) Mr. Kakalia, at the suggestion of this Court, has submitted
the figures of base FSI in respect of each of the buildings (without use of
TDR) as under:
BUA excluding TDR
Building A-1: 11186.41 sq.m. [Satellite Garden Phase I]
Building A-2: 3126.32 sq.m. [3936.32 – 720] [Sadhguru AB]
Building A-3: 328.74 sq.m. [Not completed]
Building A-4: 830.92 sq.m. [3917.76 – 3086.08] [Sadhguru CD]
Building A-5: 5778 sq.m. [20728.06-14949.6] [Satellite Tower]
Existing Temple: 244.31 sq.m.
64) Mr. Kakalia has submitted that his client has completed the
development on the plot and the last building (building No. 5) is yet to
be constructed by the original owners as per the contractual
arrangement between the parties.
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CONSIDERATION OF SUBMISSIONS, REASONS AND ANALYSIS
65) The issue that is taken up for consideration in the present
Petitions is about conveyance of land to the organisations of flat
purchasers, whose buildings are situated in a layout development. When
more than one building is constructed in a layout land and FSI and BUA
sanctioned in respect of the entire layout land is distributed for
construction of various buildings in the layout, division of the layout
land for conveyance purposes many times becomes a contentious issue.
This is particularly when the buildings are constructed by utilisation of
BUAs under different schemes/potentials, such as (i) buildings
constructed with base/inherent FSI, (ii) buildings constructed with use of
full/partial TDR, (iii) buildings constructed with base FSI, but flowing
through different FSI regimes (iv) buildings constructed under incentive
schemes such as cluster development, slum schemes, IT Parks etc. In
such a situation, it becomes difficult to have an apple-to-apple
comparison for the purpose of proportionate distribution of land in the
layout to be conveyed to organisations of flat purchasers formed by
different buildings.
66) During yesteryears, the concept of house-owning was
simple. A person interested in buying and owning a house would
purchase the land and construct a house thereon. Alternatively, he would
purchase a constructed house like a bungalow together with the plot of
land. In such a scenario, the purchaser would become owner of both land
as well as the constructed structure. In such a case, ownership of land
goes hand-in-hand with ownership of constructed structure. However, as
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the time passed and lesser and lesser land became available for housing,
especially in the urban areas, multistorey buildings came to be
constructed by implementing house schemes, where multiple purchasers
came together and decided to share ownership in the land through
ownership of their respective superstructures. To illustrate, if a plot of
land was taken up for development by constructing four-storey building
comprising of four flats (one flat on each floor) and four different
purchasers purchased one flat each of equivalent size, each of the four
flat purchasers became owners in respect of the land to the extent of 25%
share therein. This concept is still prevalent in many parts of the country
such as in New Delhi, where limited number of floors are constructed on
a plot of land and each floor owner becomes proportionate owner in the
land beneath the structure.
67) However, in Maharashtra and particularly in Mumbai, the
concept of owning flats in multistorey buildings was adopted even prior
to independence. Multistorey buildings were constructed in Mumbai
even prior to independence. Post independence, the activity of
constructing multistorey buildings in urban areas in the State picked up
pace. A landowner started engaging a professional developer for
constructing building(s) on the land owned by him/her. Since there was
demand for housing in urban areas, planning authorities permitted
construction of multistorey buildings by implementing the concept of
floor space index (FSI), meaning thereby that it was permissible to build
superstructures proportionate to the size of land. For FSI 1.00,
construction equivalent to the size of the land became permissible.
However, on account of requirement of leaving marginal open spaces,
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exclusion of areas covered by staircase, verandahs, etc., need arose for
the developers to go vertically, thereby constructing multiple flats on the
land taken up for development.
68) However, the entry of professional developers in house
building activities gave rise to many malpractices in construction and
sale of flats to the purchasers. The developers sold only superstructures
(flats) while retaining ownership in the land with the aim of milking
further development potential. It therefore became necessary to regulate
the activities of promoters and developers, and to safeguard the interests
of flat purchasers. Need was also felt for statutory governing of relation
between promoter and flat purchasers, rather than leaving the matters
only in the realm of private contracts. With that objective, the State of
Maharashtra enacted MOFA in the year 1963.
STATUTORY SCHEME OF MOFA AND MOF RULES
69) The MOFA has been enacted taking note of acute shortage of
housing in several areas of the State and to prevent sundry abuses and
malpractices by the developers and for regulating construction, sale of
flats and for collective management of the buildings by the flat
purchasers. The Preamble of the MOFA reads thus:
WHEREAS, it has been brought to the notice of the State Government that,
consequent on the acute shortage of housing in the several areas of the State
of Maharashtra, sundry abuses, malpractices and difficulties relating to the
promotion of the construction of, and the sale and management and transfer of
flats taken on ownership basis exist, and are increasing;
AND WHEREAS, the Government in order to advise itself as respects the
manner of dealing with these matters, appointed a committee by Government
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Resolution in the Urban Development and Public Health Department, No. S.
248-79599-F, dated the 20th May 1960, to inquire into and report to the State
Government on the several matters referred to aforesaid with the purpose of
considering measures for their amelioration;
AND WHEREAS, the aforesaid Committee has submitted its report to
Government in June 1961, which report has been published for general
information;
AND WHEREAS, it is now expedient after considering the recommendations
and suggestions made therein, to make provision during the period of such
shortage of housing, for the regulation of the promotion of the construction,
sale and management and transfer of flats taken on ownership basis in the
State of Maharashtra;
70) MOFA broadly deals with the compulsory execution of flat
purchase agreements, project disclosures, timely possession, society
formation and conveyance. It would be necessary to take a brief note of
the important provisions of MOFA, which are relevant for deciding the
issue taken up for discussion/consideration. Section 2(a-1) of MOFA
defines the term ‘flat’ as under:
(a-1) “Flat” means a separate and self-contained set of premises used or
intended to be used for residence, or office, show-room or shop or godown or
for carrying on any industry or business (and includes a garage), the premises
forming part of a building and includes an apartment.
71) Section 2(c) of MOFA defines the term ‘promoter’ to mean
every person who constructs or causes to be constructed a block or
building or flats or apartments for the purpose of selling the same. The
phrase has been interpreted to include the land owner also, who causes
construction. Section 2(c) of the MOFA provides thus:
(c) “promoter” means a person and includes a partnership firm or a body or
association of persons whether registered or not who constructs or causes to
be constructed a block or building of flats or apartments for the purpose of
selling some or all of them to other persons, or to a company, co-operative
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society or other association of persons, and includes his assignees; and where
the person who builds and the person who sells are different persons, the term
includes both;
72) Section 4 of MOFA mandates that before accepting advance
payment or deposit for purchase of flat, the promoter must execute and
register an agreement with the flat purchasers. For the present purpose,
the most vital ingredient of section 4 of MOFA is that the agreement
needs to be in the prescribed form and must contain the particulars
specified in clause (a) of sub-section (1A) and must accompany the
documents enumerated in clause (b) of sub-section (1B). Thus, there is a
statutory duty on the developer to make the necessary disclosures and
also to append plans and specifications of the flat as approved by the
local authority. Section 4 of MOFA provides thus:
4. Promoter before accepting advance payment or deposit to enter into
agreement and agreement to be registered.—
(1) Notwithstanding anything contained in any other law, a promoter who
intends to construct or constructs a block or building of flats, all or some of
which are to be taken or are taken on ownership basis, shall, before, he accepts
any sum of money as advance payment or deposit, which shall not be more
than 20 per cent. of the sale price enter into a written agreement for sale with
each of such persons who are to take or have taken such flats, and the
agreement shall be registered under the Registration Act, 1908 (XVI of 1908)
(hereinafter in this section referred to as “the Registration Act”) and such
agreement shall be in the prescribed form.
(1A) The agreement to be prescribed and sub-section (1) shall contain inter
alia the particulars as specified in clause (a); and to such agreement there shall
be attached the copies of the documents specified in clause (b),—
(a) particulars,—
(i) if the building is to be constructed, the liability of the
promoter to construct it according to the plans and
specifications approved by the local authority where such
approval is required under any law for the time being in force;
(ii) the date by which the possession of the flat is to be handed
over to the purchaser;
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(iii) the extent of the carpet area of the flat including the area of
the balconies which should be shown separately;
(iv) the price of the flat including the proportionate price of the
common areas and facilities which should be shown separately,
to be paid by the purchaser of flat; and the intervals at which
instalments thereof may be paid;
(v) the precise nature of organisation to be constituted of the
persons who have taken or are to take the flats;
(vi) the nature, extent and description of limited common areas
and facilities;
(vii) the nature, extent and description of limited common areas
and facilities, if any;
(viii) percentage of undivided interest in the common areas and
facilities appertaining to the flat agreed to be sold;
(ix) statement of the use of which the flat is intended and
restriction of its use, if any;
(x) percentage of undivided interests in the limited common
areas and facilities, if any, appertaining to the flat agreed to be
sold;
(b) copies of documents,—
(i) the certificate by an Attorney-at-law or Advocate under
clause (a) of sub-section (2) of section 3;
(ii) Property Card or extract of village Forms VI or VII and XII or
any other relevant revenue record showing the nature of the
title of the promoter to the land on which the flats are
constructed or are to be constructed;
(iii) the plans and specifications of the flat as approved by the
concerned local authority.
(2) Any agreement for sale entered into under sub-section (1) shall be
presented by the promoter or by any other person competent to do so under
section 32 of the Registration Act, at the proper registration office for
registration, within the time allowed under sections 23 to 26 (both inclusive) to
the said Act and execution thereof shall be admitted before the registering
officer by the person executing the document or his representative, assign or
agent as laid down in sections 34 and 35 of the said Act also within the time
aforesaid:
Provided that, where any agreement for sale is entered into, or is purported to
be entered into, under sub-section (1), at any time before the commencement
of the Maharashtra Ownership Flats (Regulation of the promotion of
construction, sale, management and transfer) (Amendment and Validating
Provisions) Act, 1983 (Mah. V of 1984), and such agreement was not presented
for registration or was presented for registration but its execution was not
admitted before the registration officer by the person concerned, before the
commencement of the said Act, then such document may be presented at the
proper registration office for registration, and its execution may be admitted,
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by any of the persons concerned referred to above in this sub-section, on or
before the 31st December 1984, and the registering officer shall accept such
document for registration, and register it under the Registration Act, as if it
were presented, and its execution was admitted, within the time laid down in
the Registration Act:
Provided further that, on presenting a document for registration as aforesaid if
the person executing such document or his representative, assign or agent
does not appear before the registering officer and admit the execution of the
document, the registering officer shall cause a summons to be issued under
section 36 of the Registration Act requiring the executant to appear at the
registration office, either in person or by duly authorised agent, at a time fixed
in the summons. If the executant fails to appear in compliance with the
summons, the execution on the document shall be deemed to be admitted by
him and the registering officer may proceed to register the document
accordingly. If the executant appears before the registering officer as required
by the summons but denies execution of the document, the registering officer
shall, after giving him a reasonable opportunity of being heard, if satisfied that
the document has been executed by him, proceed to register the document
accordingly.
73) Section 7 of MOFA prohibits alteration or addition without
consent of flat purchasers after the plans and specifications are
disclosed. Thus, once the approved plans are disclosed or furnished to
flat purchasers, the promoter cannot make any alterations or additions
in the structure prescribed therein in respect of any flat, nor can he make
other alterations or additions in the structure of the building without the
previous consent of all the flat purchasers. Section 7A has been
incorporated by Amendment Act of 1986, which seeks to clarify that
clause (ii) of sub-section 1 of section 7, which was incorporated by 1986
amendment shall be deemed to be effective at all material times and that
the expression “or construct any additional structures” used therein
existed before the commencement of the Amendment Act. Section 7 and
7A of MOFA provide thus:
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7. After plans and specifications are disclosed no alterations or additions
without consent of persons who have agreed to take the flats; and defects
noticed within three years to be rectified.—
(1) After the plans and specifications of the building as approved by the local
authority as aforesaid, are disclosed or furnished to the persons who agrees to
take one or more flats, the promoter shall not make—
(i) any alteration in the structures described therein in respect of the
flat or flats which are agreed to be taken, without the previous consent
of that persons;
(ii) any other alterations or additions in the structure of the building
without the previous consent of all the persons who have agreed to take
the flats in such building.
(2) Subject to sub-section (1), the building shall be constructed and completed
in accordance with the plans and specifications aforesaid; and if any defect in
the building or material used, or if any unauthorized change in the
construction is brought to the notice of the promoter within a period of three
years from the date of handing over possession, it shall wherever possible be
rectified by the promoter without further charge to the persons who have
agreed to take the flats, and in other cases such person shall be entitled to
receive reasonable compensation for such defect or change. Where there is a
dispute as regards any defect in the building or material used, or any
unauthorised change in the construction, or as to whether it is reasonably
possible for the promoter to rectify any such defect or change, or as regards the
amount of reasonable compensation payable in respect of any such defect or
change which cannot be, or is not rectified by the promoter, the matter shall,
on payment of such fee as may be prescribed, and within a period of three
years from the date of handing over possession, be referred for decision,—
(i) in an urban agglomeration as defined in clause (n) of section 2 of the
Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976), to such
competent authority authorised by the State Government under clause
(d) of section 2 of that Act, and
(ii) in any other area, to such Deputy Chief Engineer, or to such other
Officer of the rank equivalent to that of Superintending Engineer in the
Maharashtra Service of Engineers, of a Board established under section
18 of the Maharashtra Housing and Area Development Act, 1976 (Mah.
XXVIII of 1977),
as the State Government may, by general or special order, specify in this behalf.
Such competent authority, Deputy Chief Engineer or, as the case may be, the
other officer of a Board shall, after inquiry, record his decision, which shall be
final.
7A. Removal of doubt.—
For the removal of doubt, it is hereby declared that clause (ii) of sub-section (1)
of section 7 having been retrospectively substituted by clause (a) of section 6
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of the Maharashtra Ownership Flats (Regulation of the promotion of
construction, sale, management and transfer) (Amendment) Act, 1986 (Mah.
XXXVI of 1986) (hereinafter in this section referred to as “the Amendment
Act”), it shall be deemed to be effective as if the said clause (ii) as so
substituted has been in force at all material times; and the expression “or
construct any additional structures” in clause (ii) of sub-section (1) of section 7
as it existed before the commencement of the Amendment Act and the
expression “constructed and completed in accordance with the plans and
specifications as aforesaid” and “any unauthorised change in the construction”
in sub-section (2) of section 7 shall, notwithstanding anything contained in
this Act, or in any Agreement, or in any judgement, decree or order of any
Court, be deemed never to apply or to have applied in respect of the
construction of any other additional building or structures constructed or to be
constructed under a scheme or project of development in the layout after
obtaining the approval of a local authority in accordance with the building
rules or building bye-laws or Development Control Rules made under any law
for the time being in force.
74) Under Section 10 of MOFA, it is a statutory duty on a
promoter to form a cooperative society or a company within the
prescribed period. Section 10 of the Act provides thus:
10. Promoter to take steps for formation of co-operative society or
company.—
(1) As soon as a minimum number of persons required to form a Co-operative
society or a company have taken flats, 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 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 Co-
operative society or as the case may be, of a company. Nothing in this section
shall affect the right of the promoter to dispose of the remaining flats in
accordance with the provisions of this Act:
Provided that, if the promoter fails within the prescribed period to submit an
application to the Registrar for registration of society in the manner provided
in the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), 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:
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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.
(2) If any property consisting of building is constructed or to be constructed
and the promoter submits such property to the provisions of the Maharashtra
Apartment Ownership Act, 1970 (Mah. XV of 1971), by executing and
registering a Declaration as provided by that Act then the promoter shall
inform the Registrar as defined in the Maharashtra Co-operative Societies Act,
1960 (Mah. XXIV of 1961), accordingly; and in such cases, it shall not be lawful
to form any co-operative society or company.
75) Section 11 of MOFA imposes statutory duty on the promoter
to convey in favour of organisation of flat purchasers his right, title and
interest in the land and the building by executing all the relevant
documents in accordance with the agreement executed under Section 4
either within the agreed period or within the prescribed period. Sub-
sections (2) to (5) have been incorporated in Section 11 by 2008
amendment which confers jurisdiction on the Competent Authority to
issue a certificate of unilateral deemed conveyance in the event promoter
fails to execute conveyance in favour of society under sub-section (1).
Section 11 of MOFA provides thus:
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 co-
operative 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.
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(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
sub-section (1).
(3) If the promoter fails to execute the conveyance in favour of the Co-
operative society formed under section 10 or, as the case may be, the Company
or the association of apartment owners, as provided by sub-section (1), within
the prescribed period, the members of such Co-operative 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 Sub-Registrar or any other appropriate Registration
Officer under the Registration Act, 1908 (16 of 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 Sub-Registrar or the concerned
appropriate Registration Officer appointed under the Registration Act, 1908 (16
of 1908), the certificate issued by the Competent Authority alongwith the
unilateral instrument of conveyance, the Sub-Registrar or the concerned
appropriate registration Officer shall, notwithstanding anything contained in
the Registration Act, 1908 (16 of 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 fit
case for unilateral conveyance, register that instrument as, ‘deemed
conveyance’.
76) Accordingly, Competent Authorities have been constituted
under Section 5A of MOFA which reads thus:
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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 Co-operative
Societies, to be the Competent Authority, for an area or areas to be specified in
such notification and different officers may be appointed as Competent
Authority for different local areas, for the purposes of exercising the powers
and performing the duties under sections 5, 10, 11 and 11A of this Act.
77) Section 16 of MOFA gives overriding effect to the provisions
of the Act over any contract to the contrary and the same also provides
that provisions of MOFA shall be in addition to the provisions of Transfer
of Property Act, 1882. Section 16 of the Act provides thus:
16. Act to be in addition to Transfer of Property Act and to over-ride
contract to the contrary.—
The provisions of this Act, except where otherwise provided, shall be in
addition to the provisions of the Transfer of Property Act, 1882 (IV of 1882),
and shall take effect notwithstanding anything to the contrary contained in
any contract.
78) In exercise of powers conferred under Section 15 of MOFA,
MOF Rules have been framed. Rule 3 of MOF Rules deals with the
manner of making disclosure and Rule 4 enumerates copies of
documents to be provided to the flat purchasers. Rule 3 and 4 of MOF
Rules provide thus:
3. Manner of making disclosure.-
(1) A promoter for the purposes of making disclosure of any document referred
to in section 3 or prescribed thereunder shall produce the original of such
document before the person intending to take or taking one or more flats. The
promoter shall display or keep all the documents, plans or specifications (or
copies thereof) referred to in clauses (a), (b) and (c ) of sub-section (2) of the
said section 3 at the site and permit inspection thereof”; Such person may ask
the promoter all relevant questions for seeking further information or
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clarification in respect of any documents of matter to be disclosed, produced or
furnished by or under the provisions of the Act; and the promoter shall be
legally bound to answer all such questions to the best of his knowledge and
belief.
(2) The promoter while making disclosure of the outgoings as required by
clause (j) of sub-section (2) of section 3 shall state the basis on which any
estimated figures or other information is given.
(3) The Promoter shall, when the flats are advertised for sale, disclose inter alia
in the advertisement the particulars as required by sub-clauses (i) to (iv) (both
inclusive) of clause (m) of sub-section (2) of section 3.
4. True copies of certain documents to be given.-
A promoter shall, on demand and payment of a reasonable charge therefor,
give to any person intending to take or taking one or more flats true copies of
the following documents, namely:
(a) all documents of title relating to the land on which the flats are
constructed, or are to be constructed, which are in the promoter’s
possession or power;
(b) the certificate by an Attorney-at-Law or Advocate referred to in
clause (a) of sub-section (2) of section 3;
(c) all documents relating to encumbrances (if any) on such land,
including any right, title, interest or claim, of any party in or over such
land;
(d) the plans and specifications of the buildings built or to be built on
the land referred to in clause (e) of sub-section (2) of Section 3;
(e) a list of fixtures, fittings and amenities (including the provision for
one or more lifts) provided or to be provided for the flat;
(f) a list referred to in clause (g) of sub-section (3) of section 3;
(g) a list of all outgoing referred to in clause (j) of sub-section (2) of
section 3 and the basis on which any estimated figures or other
information is given to the person intending to take or taking the flat.
79) Rule 5 provides for the particulars to be contained in the
agreement and further provides that the agreement needs to be in Form
V in MOF Rules. Rule 5 of MOF Rules provides thus:
5. Particulars to be contained in agreement.-
The promoter shall, before accepting any advance payment or deposit, enter
into an agreement with the flat purchaser in Form V containing the particulars
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specified in clause (a) of sub-section (1A) of section 4 and shall attach thereto
the copies of the documents specified in clause (b) of the said sub-section (1A).
80) Rule 8 of MOF Rules prescribes the period during which
promoter must apply for formation of society and the period prescribed
thereunder is 4 months from the date on which minimum number of
persons required to form the organisation of flat purchasers have taken
flats. Rule 8 provides thus:
8. Period for submission of application for registration of Co-operative
Society or company of flat purchasers.-
Where a co-operative society or a company of person taking the flats is to be
constituted, the promoter shall submit an application to the Registrar for
registration of the co-operative society or the company, as the case may be,
within four months from the date on which the minimum number of persons
required to form such organisation have taken flats.
Where the apartment takers propose to submit the apartments to the
provisions of the Maharashtra Apartment Ownership Act, 1970, by executing
Declarations and Deeds of Apartments as required by that Act, the promoter
shall inform the Registrar as defined in the Maharashtra Co-operative Societies
Act, 1960, as soon as possible after the date on which all the apartment owners
(being not less than five) have executed such Declarations and Deeds of
Apartment.
81) Rule 9 of MOF Rules prescribes the period of 4 months from
the date on which organisation of flat purchasers is formed for
conveyance of land and building of the promoter in favour of such
organisation. Rule 9 provides thus:
9. Period for conveyance of title of promoter to organisation of flat
purchasers.-
If no period for conveying the title of the promoter to the organisation of the
flat purchasers is agreed upon, the promoter shall (subject to his right to
dispose of the remaining flats, if any) execute the conveyance within four
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months from the date on which the Co-operative society or the company is
registered or, as the case may be, the association of the flat takers is duly
constituted.
When a promoter has submitted his property to the provisions of the
Maharashtra Apartment Ownership Act, 1970 by executing and registering a
Declaration as required by section 2 of the Act, and no period for conveying the
title of the promoter in respect of an apartment to each apartment taker is
agreed upon, the promoter shall execute the conveyance or deed of apartment
in favour of each apartment taker within four months from the date, the
apartment taker has entered into possession of his apartment.
The promoter shall file with the Competent Authority a copy of the
conveyance executed by him under sub-section (1) of section 11 within a
period of two months from the date of its execution.
82) It would also be necessary to make a quick reference to Form
V appended to MOF Rules. Under Form V, a model form of agreement to
be entered into by the promoter and flat purchaser is prescribed. There
are explanatory notes to Form V and Note 1 is of vital importance. Note 1
provides thus:
Note No 1:-This is only a model form of agreement, which will have to be
modified and adapted in each case having regard to the facts and
circumstances of each case but in any event such clauses 1, 2, 3, 4, 5, 8, 9, 10,
11, 12, 13 and 22 which are statutory and mandatory according to the
provisions of the Act and these rules shall be retained in each and every
individual agreement/s executed between the Promoter and Flat Purchaser.
Any departure or variation from these statutory and mandatory conditions,
being violative and ultra vires of the provisions of the Maharashtra Ownership
Flats (Regulation of the Promotion of Construction, Sale, Management and
Transfer) Act, 1963 (hereinafter referred to as “the said Act”) will not be
binding and enforceable upon the parties, such conditions being void ab initio:
83) It is thus mandatory to incorporate clauses 1 to 5, 8, 9,
10,11,12,13 and 22 in the agreement which are declared as statutory and
mandatory in nature. Any covenant contrary to those enumerated
clauses automatically becomes void ab initio. Clause 13 of Form V
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agreement contains statutory covenant for conveyance of land and
building within a period of 4 months of registration of society. Clause 13
of the Form V agreement reads thus:
13. Unless it is otherwise agreed to by and between the parties hereto the
Promoter shall, within four months of registration of the Society or Limited
Company, as aforesaid cause to be transferred to the Society or Limited
Company all the right, title and the interest of the Vendor/Lessor/Original
Owner/Promoter and/or the owners in the aliquot part of the said land
together with the building/s by obtaining/ or executing the necessary
conveyance/1 and or assignment of lease of the said land (or to the extent as
may be permitted by the authorities) and the said building in favour of such
Society or Limited Company, as the case may be such conveyance/assignment
of lease shall be in keeping with the terms and provisions of this Agreement.
84) Thus, there is a contractual as well as statutory obligation
on a promoter to convey in favour of organisation of flat purchasers his
right, title and interest in land and building within 4 months of
formation of society. The obligation is contractual on account of
mandatory incorporation of clause 13 in flat purchase agreement. As
observed above, flat cannot be sold without executing agreement under
Section 4. The agreement needs to be in accordance with Rule 5 which
prescribes Form V. Form V contains clause 13, which is statutory in
nature and cannot be deleted or excluded or modified. Any departure
from clause 13 renders the contractual arrangement void and the
statutory right to the contrary prevails. Thus, scheme of MOFA mandates
that the promoter must undertake the contractual obligation to convey
the land and building within 4 months of formation of society.
85) Notwithstanding the contractual obligation and even if in a
given case, the developer omits to incorporate clause 13 of Form V
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agreement or privately contracts with flat purchasers otherwise, there is
still a statutory duty on the promoter to convey the land and building
within 4 months of formation of society. As observed above, Section 16 of
MOFA gives overriding effect to provision of MOFA over any contractual
clause. Thus, even if a promoter may privately contract with a flat
purchaser that the land would never be conveyed or that only leasehold
rights in land would be conveyed or that conveyance would be executed
after 30 years or after completion of entire layout development, such
contractual clause would be rendered void and combined effects of
provisions of Sections 4, 11 and 16 of MOFA and Rules 5 and 9 of MOF
Rules would make a promoter statutorily liable to convey the land and
building within the prescribed period i.e., period of 4 months from the
date of formation of society.
INTRODUCTION OF REMEDY OF DEEMED CONVEYANCE IN MOFA
86) The amendments effected in 2008 to the MOFA mark a
watershed moment in protecting the rights of flat purchasers in respect
of conveyance of land and buildings. The Legislature noted the
reluctance and avoidance by developers in conveying the land in favour
of organisation of flat purchasers. Therefore, the concept of deemed
conveyance was introduced in the form of sub-sections (3) to (5) in
Section 11 of MOFA. The Statement of Reasons and Objects for
Amendment Act-IV of 2008 reads thus:
Statement of Objects and Reasons
The Maharashtra Ownership Flats (Regulation of the Promotion of Construction,
Sale, Management and Transfer) Act, 1963 has been enacted by the Government of
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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.
2. 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 proposed 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,—
(1) 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:
(i) 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 12-A), 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 Penal
Code, 1860 and every competent authority is to be deemed to be a civil
court for the purpose of Sections 345 and 347 of the Criminal Procedure
Code, 1973.
3. The Bill seeks to achieve the above objectives.
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87) Thus, the provision for deemed conveyance under Section 11
of MOFA is made by the Legislature after noticing failure on the part of
the promoters and developers in the State of Maharashtra to convey
lands in favour of the societies.
88) If the promoter fails to perform the contractual obligation
(under clause 13 of the Form V Agreement) or the statutory obligation
under Section 11(1) of MOFA read with Rule 9 of MOF Rules, the
organisation of flat purchasers can make an application to the
Competent Authority for deemed conveyance. After conducting a
summary inquiry by considering the flat purchase agreements,
sanctioned plans and other relevant documents and after providing an
opportunity of hearing to the promoter, the Competent Authority can
issue a certificate to the Sub-Registrar or 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.
89) Thus ‘failure’ by the promoter to perform the statutory duty
confers jurisdiction on the Competent Authority to entertain and decide
the application for deemed conveyance. Occurrence of ‘failure’ within the
meaning of Section 11(3) of MOFA thus constitutes a jurisdictional fact
for the Competent Authority. [SEE: Nahar Builders Ltd. Vs. Orchid
Enclave Cooperative Housing Society Ltd.17]
17
Writ Petition No. 6063 of 2026 decided on 26 July 2026
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90) Once a certificate of deemed conveyance is issued under
Section 11(4), the organisation of flat purchasers can present such
certificate to the Registration Officer for registration under the
Registration Act, 1908 and after issuing notice to the promoter, the
Registrar registers the instrument as ‘deemed conveyance’.
THE CONCEPT OF ‘DEEMED’ CONVEYANCE
91) As observed above, there is a purpose for which provisions of
sub-sections (3) to (5) are inserted in Section 11 of the MOFA. The
provision for deemed conveyance is consciously made by the Legislature
after noticing rampant failure on the part of the promoters to convey
land in favour of organisation of flat purchasers. The Legislature was
alive to the situation that by the year 2008, most of the societies,
associations of apartments, etc. were without conveyance of land. Many
buildings in cities like Mumbai, Pune, etc. had outlived their lifespan and
needed immediate redevelopment. Though Section 11(1) of the MOFA
imposes statutory duty on promoters to convey land, the only remedy
available to the organisation of flat purchasers was to file a suit for
securing conveyance. Decision of suits was taking years. To illustrate, in
the present case itself, the suit filed by Satellite Garden-I CHSL in the
year 2010 for conveyance is still pending. It was therefore necessary to
make available faster, cheaper and swifter remedy for investing the title
in the land in favour of the flat purchasers.
92) However, rampant failure on the part of the promoters was
observed when most of the societies remained without title in respect of
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the lands. Developers were taking disadvantage of this position by
putting up additional construction on the strength of ownership of land
by them despite sale of all the flats in the building. Societies were finding
it difficult to undertake the work of redevelopment and flat owners were
languishing in old and dilapidated buildings. Noticing this abject failure
of objective under the MOFA, the Legislature had to step in and cure the
mischief by inserting sub-sections (3) to (5) in Section 11 of the MOFA.
What is done under sub-sections (3) to (5) of Section 11 is performance
of duty of promoter by the Competent Authority. Ordinarily, under the
Transfer of Property Act, 1882, title would pass only after the owner
executes conveyance in respect of the land. However, Sections 11(3) to
(5) of the MOFA make slight departure from provisions of the Transfer of
Property Act and permit a non-owner (Competent Authority) to effect
sale/conveyance of land in favour of organisation of flat purchasers. This
is permissible only on account of the fact that the promoter is actually
divested of title in the land by reason of sale of all flats in the building,
but continues to commit the folly of not executing the document, which
would have the effect of vesting of title in the housing society.
93) Sale of a flat in the building does not mean sale of only a
superstructure. It is a composite sale of superstructure and some interest
in the land as well. Therefore, with sale of all flats in a building, the
promoter/landowner stands divested of his title in the land. There is
nothing that remains to be conveyed on account of operation of concept
of divestment. To illustrate, if plot of land admeasuring 1000 sq.m. is
taken up for construction of building and 10 flats are constructed as
sanctioned by the Municipal Corporation and the entire development
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potential in the land is exhausted, the moment 10th flat in the building is
sold, the landowner automatically gets divested in respect of his title in
the land. What needs to be performed by him under Section 11(1) of the
MOFA is actually a formality so that vesting of title in the organisation of
flat purchasers takes place. Divesting happens automatically by sale of
flats but vesting of title requires completion of formality of execution of
Conveyance Deed in favour of organisation of flat purchasers. Thus, what
is done by the promoter under Section 11(1) of the MOFA is only the
latter act of vesting since the former act of divesting is already complete.
The promoter already loses his title in the land and all that is required to
be done by him under Section 11(1) of the MOFA is to complete the
formality of execution of document, which would then vest the title in
favour of organisation of flat purchasers.
94) The concept of divesting of title of promoter in the land and
of deemed conveyance is discussed by this Court in Darshan Mandir
CHSL Vs. District Deputy Registrar18 and it is held thus:
28. What must also be borne in mind is the fact that in most of the cases,
there is virtual loss of right of the promoter in the land and building due
to combined effect of provisions of Section 4 and Section 11 of MOFA.
With sale of each flat in the building, there is dilution of title of the
developer in the land. The moment all the flats in the building are sold,
the developer is virtually divested of title in the land. While things may
look slightly complicated in respect of multistory towers, one may take into
consideration a simple illustration of a developer undertaking construction of
four flats on a plot of land. When all four flats in the building are constructed
and sold, the four flat purchasers acquire 25% right each in the land and the
developer looses its title in the land. In a similar manner, when all flats in a
multistorey tower are sold and a cooperative society/company of flat
purchasers is formed, the promoter's title in the land gets divested and such
society/company becomes entitled to own the land on which the building is
constructed. The things may also get slightly complicated in a layout
18
2026 SCC OnLine Bom 5634
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development. However, even qua layout development, similar analogy
would apply and the developer loses proportionate title in the land to
the extent of completed buildings in the layout. It cannot be that the
developer exploits development potential in the land, constructs flats and sells
them to the purchasers, but still retains ownership in the land. This concept is
unknown to law. On the other hand, provisions of Sections 4 and 11 of MOFA
ensure that the developer is divested of his right, title and interest in the land
and the building which is statutorily required to be transferred/conveyed to the
organisation of flat purchasers. Thus what is conveyed by the competent
authority need not necessarily be the “asset” of the promoter on account of
operation of concept of divesting.
29. Ordinarily only an owner of the immovable property can execute
conveyance thereof. However, a unique concept of “deemed conveyance” is
introduced in MOFA for reasons discussed above. The concept of deemed
conveyance envisages transfer of title of land owner without his consent and in
absence of his signature on the instrument of conveyance. The transaction of
deemed conveyance is effected through registration of a certificate issued by
the Component Authority. This concept of deemed conveyance envisaging
transfer of title of a landowner against his desire is thus based on the principle
of divesting of title. Once the development potential as per the sanctioned plan
is exploited, buildings are constructed, flats are sold and an organization of flat
purchasers is formed, the developer loses title in the land and the building. The
law enjoins a duty on him to transfer the title in the land and the building in
favour of the organization of flat purchasers [Section 11(1) of MOFA]. However,
if the developer fails in performance of statutory duty by not transferring the
title, the competent authority steps into developer's shoes and issues a
certificate of unilateral deemed conveyance. The law thus presumes loss of title
of the developer once failure occurs on his part to perform the duty under
Section 11(1) of MOFA. This presumption is however rebuttable. Even after the
certificate of unilateral deemed conveyance is issued and registered, the
developer can still institute a suit and demonstrate that the title in the land or
in portion thereof still vests in him. Thus, the statutory scheme of Section
11 of MOFA is such that there is presumption of loss of title in the land
and the building and it is on this presumption that a certificate of
unilateral deemed conveyance is issued by the Component Authority. Till
the developer secures a declaration from a Court to the contrary through
a decree, the instrument of deemed conveyance based on such
presumption continues to remain valid for all purposes. ….
(emphasis added)
95) When the land is subjected to a housing scheme by the
landowner, either by himself or through a promoter, the statutory
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obligation to convey the land automatically kicks in. Once plans are
sanctioned and sale of flats commences by execution of Section 4
Agreements, the landowner continues to hold the title in the land so
subjected to a housing scheme only for the purpose of completing of
construction and for conveying the same to the organisation of flat
purchasers. The moment the development potential as per the disclosed
sanctioned plans is exploited by sale of the last flat in the building, the
title in the land is lost and what remains is only an obligation to convey.
Section 10 of MOFA provides for formation of a cooperative housing
society even before all the flats in the building are sold. It is not
compulsory for the developer to sell all the flats in the building in a
particular time. If he chooses to delay sale of all flats, but a society is
formed, the promoter can become member of the society qua unsold
flats. But the obligation to convey the land and the building does not
stop or get postponed even where there is delay in sale of flats.
96) The concept of dual ownership is thus ordinarily unknown
to MOFA. Once the land is subjected to housing scheme by constructing
a building or a block comprising ‘flats’ (as defined under MOFA) and once
the flats are sold, obligation to convey the land gets attached and must
be fulfilled. The landowner/promoter cannot state or even contractually
provide that the flat purchasers/their organisations would own only the
superstructure and that the land beneath shall always remain in the
ownership of the landowner/promoter. Whatever that is owned by the
promoter must be conveyed. Thus, the law does not recognize a concept
where only superstructure can be sold to the flat purchasers, but the land
would continue to remain in the ownership of the promoter. Except in
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rare cases where the land taken up for development itself is a leased
land, the ownership rights in the land must statutorily be conveyed in
favour of the organisation of flat purchasers. Provisions of MOFA are
thus the antithesis of the concept of dual ownership.
97) As observed above, the former act of divestment of title of
the promoter automatically occurs upon sale of the last flat in the
building. However, the latter act of vesting of title in favour of the
Society needs execution of a formal document. The Competent Authority
only performs the latter act on account of the occasion of failure on the
part of the promoter. The land is thus ‘deemed to be conveyed’ in favour
of the organisation of flat purchasers even though the
landowner/promoter does not desire or is unwilling to convey the same.
This is the reason why Section 16 of the MOFA makes provisions of the
Act in addition to the provisions of the Transfer of Property Act. Without
the signature and consent of the landowner/promoter, the deeming
fiction occurs and the title passes from the landowner to the
organisation of flat purchasers.
98) Thus, the conveyance under Sections 11(3) to (5) of MOFA is
treated as ‘deemed’ since the land owner or the promoter is not a
party/signatory to the document/instrument of conveyance. Someone
not owning the land issues a certificate that the land is conveyed and
such certificate is registered as an instrument of deemed conveyance.
99) Thus, the Legislative intention behind empowering the
Competent Authority to issue a certificate of unilateral deemed
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conveyance in favour of organisation of flat purchasers is to curb the
malpractices on the part of the developers. Introduction of concept of
deemed conveyance has largely been successful and has benefited several
societies / associations of apartments / companies in securing title in
respect of the land.
CONCEPT OF DEEMED CONVEYANCE INTRODUCED IN MOFA TO CURE THE
MISCHIEFS COMMITTED BY THE DEVELOPERS
100) As observed above, no difficulty arises in case of a single
building erected on a plot of land where the Competent Authority can
swiftly pass an order of deemed conveyance. No difficulty arises even
when multiple buildings in a layout are constructed on the basis of a
single sanctioned plan. Even in such scenario, the Competent Authority
can swiftly make an order of deemed conveyance of the entire land in
favour of either the federation or jointly in the name of all societies. The
Competent Authority can even grant partial conveyance in respect of one
out of multiple societies by proportionately sub-dividing the land. The
difficulty only arises where plans are revised and additional BUA is
sanctioned. In this scenario, the mischief is committed again by the
developer. The developer applies for revised permission and takes benefit
of higher BUA due to introduction of new scheme or change in the FSI
regime.
101) The issue for consideration is whether the Competent
Authority can be prevented from exercising jurisdiction under Section 11
of the MOFA merely because the developer has committed the mischief
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of getting the plans revised during currency of the layout development?
Can the argument of creation of title dispute relating to proportionate
land division be permitted to be raised for the purpose of defeating the
jurisdiction of the Competent Authority under Section 11 of the MOFA?
The answer, to my mind, appears to be in the negative. After all, MOFA
and particularly the 2008 amendment introducing the concept of deemed
conveyance is aimed at preventing the mischief by the developers. The
mischief prevention concept of MOFA is dealt with by this Court in
Haresh Vijaysinh Bhatia & Ors. Vs. District Deputy Registrar & Ors. 19.
Referring to the Apex court judgment in Municipal Corporation of
Greater Mumbai v. Ankita Sinha20, this Court held as under:
60. The Mischief Rule also known as Heydon's Rule is often applied by courts in
determining the true objective behind enacting a statute by identifying the
exact “mischief” that the statue seeks to correct or prevent. The rule is applied
to surpass the mischief and to advance the remedy. Referring to seven Judge
Bench decision in Bengal Immunity Co. Ltd. v. State of Bihar, the Supreme
Court has held in Municipal Corpn. of Greater Mumbai v. Ankita Sinha as
under:
31. While adequate clarity is discernible in the phraseology that is
employed under Section 14 and other provisions of the National Green
Tribunal Act 2010, as shall be discussed in the latter parts of the
judgment, the intention behind the statute should receive our careful
attention. Tracing the legislative history for creation of NGT it is seen
that NGT is intended to address wide-ranging societal concerns and
these have prompted us to opt for purposive interpretation. The statute
will have to be read in its entirety and each provision of the Act must be
given its due meaning by comprehending the mischief it intends to
remedy. The chosen interpretive exercise is best understood from the
treatise Interpretation of Statutes, authored by Justice G.P. Singh who
explained thus:
xxxx
61. Section 11 MOFA is enacted to suppress the mischief by promoters and
developers and to advance the remedy for the home buyers for securing title in
respect of the land and building.
19
2025 SCC Online Bom 1981
20
(2022) 12 SCC 401
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102) Since the objective behind enacting the provisions of MOFA
is to cure the mischief, merely because layout development is completed
with multiple revisions in the plan by taking benefit of additional
incentive FSI/BUA, the same cannot be a ground for denying the
statutory right of conveyance through the Competent Authority to the
buildings of such layout. Therefore, instead of holding that the
Competent Authority should stay away from such instances by relegating
the parties to the remedy of civil suit, it would be more appropriate to lay
down the principles governing conveyance in respect of such layout
developments with a view to achieve the legislative object under Section
11 of the MOFA.
DEEMED CONVEYANCE IS ALSO A ‘CONVEYANCE’ IN REAL SENSE AND FOR
ALL PRACTICAL PURPOSES
103) Though deemed conveyance involves a deeming fiction and
is granted through a summary inquiry, once granted, it becomes a
‘conveyance’ in real sense and for all practical purposes as per the
Transfer of Property Act. Once the certificate of deemed conveyance is
registered under Section 11(5) of the MOFA, it vests title in the land and
the building in favour of the society/company/association in whose name
it is issued. Revenue entries can be effected based on registered
certificate of deemed conveyance. Use of the word ‘deemed’ in such
conveyance does not make it of a lesser value than a contractual
conveyance.
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104) The only exception in a deemed conveyance is that it can be
challenged in a civil court and a declaration to the contrary can be
secured. This is because of the summary nature of inquiry envisaged
under Section 11(3) and (4) of the MOFA. Since the inquiry before the
Competent Authority is not a detailed evidence-based inquiry and since
the Competent Authority is not supposed to decide the intricate issue of
title like a court, a contrary declaration in respect of land conveyed vide
certificate deemed conveyance can be sought from a Civil Court. In
Arunkumar H. Shah (HUF) the Apex Court has held thus:
45.1. 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
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;
45.2. 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;
105) Thus, like a contractual conveyance, even a statutory
deemed conveyance can be challenged before the Civil Court. However,
till the order of deemed conveyance is set aside by a decree of Civil
Court, the same constitutes a document of title. In Dev Ashish CHSL Vs.
State of Maharashtra21. This Court has held thus:
16. …. By issuing certificate of unilateral deemed conveyance, the
Competent Authority merely steps into the shoes of the promoter and
conveys to the organization of flat purchasers what it believed was the
right, title and interest of the promoter in the land and the building.
The certificate of conveyance so issued by the Competent
21
Writ Petition No. 13649 of 2025 decided on 7 July 2026
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Authority creates presumption of title in the party in whose
favour the certificate is issued. This presumption is however
rebuttable and the affected party can secure a declaration from
Civil Court contrary to the one made in the certificate of
unilateral deemed conveyance. This principle is recognised in the
judgment of the Apex Court in Arunkumar H. Shah HUF Vs. Avon Arcade
Premises CHSL.
(emphasis added)
106) Thus, for housing societies, securing deemed conveyance in
respect of the land and the building results in vesting of title, enabling
them to manage and deal with the same and more importantly, to
undertake redevelopment of their buildings.
DEVELOPMENT OF LAW ON DEEMED CONVEYANCE
107) Under Sections 11 (3) and (4) of the MOFA, the Competent
Authority exercises summary jurisdiction and performs the statutory
obligation of the promoter by stepping into his shoes when failure on his
part to perform those obligations occurs. Over the period of time, the
contours of scope of inquiry to be made by the Competent Authority are
to some extent broadened through various judicial pronouncements. The
role of the Competent Authority is not restricted to act only in
accordance with Section 4 Agreements, but it can also examine whether
the Agreement is in consonance with the scheme of MOFA and MOF
Rules and ensure performance of statutory obligations when contractual
arrangement is found to the contrary. The timeline for conveyance
stipulated in Section 4 Agreement can be ignored by the Competent
Authority and the one prescribed in Rule 9 of the MOF Rules can be
adhered to. Contrary to the contractual stipulation for conveyance of
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land only in favour of a federation, proportionate land can be conveyed
to individual societies. Similarly, qua the area of land to be conveyed, the
Competent Authority can look into the plans and convey land in
proportion to the BUA utilized for construction of building, rather than
conveying the area of land stipulated in the Agreement. It would be apt
to take a quick stock of judgments on these principles.
A. Conveyance of proportionate land in favour of individual societies
ignoring contractual stipulation for conveyance in favour of
federation alone
108) Many Agreements executed under Section 4 of MOFA
provide for conveyance of land only in favour of the federation upon
completion of layout development. Under the provisions of Maharashtra
Co-operative Societies Act, 1960, a federal society can be registered by
constituent cooperative housing societies formed in respect of the
buildings in the layout. Actually, conveyance of the entire land in the
layout in favour of the federation is the ultimate panacea for all the
problems of layout land division for conveyance purposes. However, in
several cases, federations are not formed or the layout development
takes years or decades for completion. In the present case itself, the
layout development commenced in 1997 and is still incomplete after
passage of 29 long years. Even though the layout development may be
complete, sometimes, societies prefer to have individual conveyances
rather than joint conveyance in favour of the federation. This gives them
the flexibility to take decisions relating to redevelopment process. Be
that as it may. This Court has recognised the principle that conveyance
of proportionate land can be granted to the individual societies ignoring
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the contractual stipulation of conveyance only in favour of the
federation. This is on account of obligation of conveyance kicking in on
expiry of period specified in Rule 9 of MOF Rules upon formation of
society in respect of one of the buildings in the layout. Thus, the
Competent Authority can convey proportionate land to the society of
completed building without waiting for formation of a federation.
109) In Veer Tower CHSL Vs. District Deputy Registrar 22 this
Court has held thus:
15. In light of the foregoing, the respondents' objection-that the
petitioner-society must await the completion of redevelopment and the
formation of a federation-is devoid of legal merit. The statutory scheme
of MOFA, particularly Section 11, is designed to confer an immediate
and enforceable right to conveyance upon societies, irrespective of
peripheral contractual or developmental contingencies. Equitable
principles further dictate that a party cannot benefit from its own delay
or default to prejudice the rights of another. The petitioner-society,
having fulfilled its obligations under the agreement, is entitled to
deemed conveyance as a matter of statutory right. The indefinite
stagnation of the redevelopment project, attributable solely to the
respondents' inaction, cannot justify further deprivation.
Thus the Competent Authority can ignore the contractual stipulation in
the Section 4 Agreement for conveyance of land only in favour of
federation and can convey proportionate land in favour of individual
societies.
B. Ownership in the land can be conveyed though the Flat Purchase
Agreement may provide for only the Lease
22
2025 SCC OnLine Bom 324
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110) The law on the issue of obligation of the promoter to convey
his right, title and interest in the land and the building (ownership in the
land) and not merely leasehold rights is now well settled. In Haresh
Vijaysinh Bhatia (supra), it was sought to be contended on behalf of the
promoter that the Competent Authority is a tribunal of limited
jurisdiction and cannot travel beyond the jurisdiction conferred under
Section 11 of MOFA, under which it has to direct deemed conveyance of
land and building ‘in accordance with the agreement executed under
Section 4’. It was contended that if the agreement executed under Section
4 of MOFA contemplates grant of only a lease, the Competent Authority
does not have the jurisdiction to rule that the covenant in the agreement
is contrary to the provisions of Section 11 of MOFA and to grant in
favour of a society something over and above the one provided for in the
agreement. It was contended that the Competent Authority must confine
itself within the contours of agreement executed under Section 4 MOFA
and that the limited role that it plays is to substitute itself in the place of
promoter while deciding the application filed under Section 11(3) and to
grant unilateral deemed conveyance of land and building strictly in
terms of the agreement executed under Section 4 MOFA. It was
contended that if any covenant in the agreement is found to be contrary
to any provisions of the MOFA or MOF Rules, the remedy for the affected
party is to file a suit to have such covenant declared void and thereafter
file application for unilateral deemed conveyance under Section 11
before the Competent Authority. It was thus contended that the
Competent Authority does not have jurisdiction while making an enquiry
under Section 11 MOFA to rule that any particular covenant in the
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agreement executed under Section 4 is contrary to the provisions of the
MOFA or MOF Rules. Rejecting the contentions, this Court held thus:
56. Thus, conjoint reading of provisions of Section 11(1) MOFA, Rule 5 and
Clause 13 of Form V agreement under MOFA Rules leaves no manner of doubt
that the promoter is required to transfer and convey in favour of a society, “his
right, title and interest in the land and building”. Thus, everything that is
owned by a promoter must be transferred and conveyed in favour of a
cooperative society or association formed by flat purchasers. Section 11 MOFA
does not permit a promoter to hold onto himself any part of right in the land
and building. Thus, MOFA contemplates automatic divesting of ownership of
promoter in the land and transfer thereof in favour of society formed by home
buyers. What is performed by the competent authority is to issue a certificate
recognising and certifying such transfer, for the purpose of registration thereof
for mutation of name of society in the revenue records.
57. Thus, if the promoter is the owner of the land, he has no option but
to transfer and convey his ownership in the land and building in favour
of society. Section 11 MOFA does not permit a promoter, who is owner of
land, to grant only leasehold rights in the land or building in favour of
the Society. Whatever is owned by the promoter must fall in the
ownership of the Society. This principle recognised under Section 11 MOFA
is premised on the concept that with sale of each flat in the building, the title
of the promoter in the land gets diluted. Section 4 MOFA seeks to strike at the
root of the mischief that was being played by the promoters in retaining
ownership in the land despite sale of all flats in the building. …...
62. Thus, a statutory right is created in favour of a society or association of flat
purchasers to have in its favour conveyance and transfer of every right which
the promoter possessed in respect of the land on which building is constructed.
If promoter is the owner of land, he must transfer and convey his ownership
right in favour of the Society. If on the other hand, promoter is a mere lessee,
he must transfer his leasehold rights in the building in favour of the Society.
Promoter cannot provide for demise of only leasehold rights if he is the owner
of the land.
65. The expression “in accordance with the agreement executed under Section
4” cannot be read in isolation in such a manner that the other words used in
the same sub-section are rendered superfluous. If agreement provides for non-
conveyance of land in favour of society and application for deemed conveyance
is to be decided strictly in accordance with the covenants of that agreement,
the words “and convey … his right, title and interest in the land and building”
used in Section 11(1) would be rendered otiose. In my view therefore, the
expression “in accordance with the agreement executed under Section 4” needs
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to be harmoniously constructed with the words “and convey … his right, title
and interest in the land and building”. Thus while conveyance can be granted
in accordance with MOFA Agreement, regard must be had to the provision
which mandates conveyance of the whole of promoter's right, title and interest
in the land and building. In that sense, the expression “in accordance with the
agreement executed under Section 4” is controlled and guided by the words
“and convey … his right, title and interest in the land and building” used in the
same sub-section. Therefore, while granting conveyance in accordance with the
MOFA Agreement, the competent authority must convey promoter's entire title
in the land and building. In other words, the contractual covenant in MOFA
Agreement cannot defeat the statutory right of association of flat purchasers to
have promoter's title in the land and building conveyed in its name in entirety.
67. If above interpretation is not made, the same would result in incongruity
and absurdity as statutory right of association of flat purchasers to have
conveyance of promoter's title in entirety would get defeated by contractual
covenant in MOFA Agreement. As observed above, Section 11 creates a
statutory right in favour of societies to have conveyed to themselves promoter's
“right, title and interest in the land and building” which would then get
defeated by a contractual covenant in the agreement providing for demise of
lease or non-conveyance of any portion of land. It is well-settled principle of
law that any interpretation which leads to confusion or absurdity must
necessarily be avoided.
72. In my view therefore, the competent authority possesses the
necessary jurisdiction to direct conveyance of land and building on
ownership basis where the promoter is owner of the land by ignoring
covenant in the agreement, which does not provide for conveyance of
land on ownership basis or grant of mere lease thereof.
(emphasis and underlining added)
Thus, in Haresh Vijaysinh Bhatia, this Court has held that the
Competent Authority possesses the necessary jurisdiction to direct
conveyance of the land and building(s) on ownership basis where the
promoter is the owner of the land by ignoring covenant in the
agreement, which does not provide for conveyance of land on ownership
basis or grant of mere lease thereof.
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C. Conveyance cannot be delayed till completion of the entire layout
development
111) This Court has repeatedly held that it is impermissible for
the developer to delay conveyance for eternity on the ground of
incomplete development of the layout. Reference in this regard can be
made to the judgments of this Court in Lok Housing and Construction
Ltd. vs. State of Maharashtra and Ors. 23, ACME Enterprises and Anr.
vs. Deputy Registrar Cooperative Societies (2) and Ors. (supra) and
Upvan Woodlands CHSL (supra).
112) In Lok Housing and Construction Ltd. (supra), this Court
interpreted the term ‘period’ appearing in Rule 9 of MOF Rules and has
held that the same connotes a fixed, determinable and reasonable span
of time. This Court held that any clause in the Agreement for Sale that
attempts to override or nullify the statutory obligation under Rule 9
must be declared void to that extent, being inconsistent with law. This
Court held in paras-17 to 24 of the judgment as under:
17. The submission advanced on behalf of the petitioner, seeking to justify
delay in execution of conveyance by relying upon contractual clauses 25 and
28 to contend that conveyance in favour of society can be executed only after
completion of the entire development scheme, cannot be accepted in the face
of the clear statutory mandate contained in Rule 9 of the Maharashtra
Ownership Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Rules, 1964 (hereinafter referred to as “the MOFA
Rules”). Rule 9 leaves no room for ambiguity and categorically prescribes the
time frame within which a promoter is required to convey title to the co-
operative housing society or association of flat purchasers. The Rule provides
that, unless a specific period is mutually agreed upon between the parties, the
promoter shall execute the conveyance deed within four months from the date
of registration of the society.
23
2025 SCC OnLine Bom 711
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18. The purpose of Rule 9 must be understood in light of the statutory scheme
of MOFA, particularly Section 11, which casts a positive obligation upon the
promoter to execute the conveyance of title in favour of the organization of
flat purchasers. The Rule is not merely procedural in nature but is a
substantive safeguard against indefinite and deliberate delay on the part of the
promoter. The four-month period is a codified timeline intended to
operationalize the legislative objective of ensuring that flat purchasers are not
left in a state of uncertainty regarding title to the land and building in which
their flats are situated. This obligation cannot be evaded on the basis of private
contractual stipulations that seek to indefinitely defer the promoter's duty, nor
can it be defeated by reference to alleged defaults by individual purchasers.
MOFA being a social welfare legislation intended to protect the interests of flat
purchasers must be interpreted in a purposive and beneficial manner. It is
settled law that in interpreting such welfare statutes, the Court must give
precedence to the legislative intent over the literal terms of any private
agreement which runs counter to such intent.
19. Of particular significance is the use of the word “period” in Rule 9 of the
MOFA Rules. The legislature has deliberately chosen this word to signify a
determinate, fixed and measurable segment of time. The ordinary and
grammatical meaning of “period” is a definite span of time, not subject to
vague or indefinite conditions. This interpretation is consistent with the well-
recognized principles of statutory interpretation, whereby words used in
subordinate legislation are to be given their natural and popular meaning
unless the context requires otherwise.
20. In the present case, the statutory language is clear and unambiguous. It
therefore warrants a plain and literal interpretation. The term “period” in Rule
9 cannot be interpreted to mean an indeterminate, future event-based
timeline such as “completion of the entire development scheme”. Such an
interpretation would amount to substituting a definite and enforceable
timeframe with a contingent and uncertain condition, thereby diluting the
efficacy of Rule 9. Courts are not permitted to rewrite statutory provisions
under the guise of interpretation, especially when doing so would defeat the
purpose and object of the legislation.
21. In the face of statutory obligations, courts are empowered and indeed duty-
bound to disregard any such clause that seeks to dilute, defer or defeat the
legislative scheme. To uphold such a clause would be to allow the promoter to
continue holding title in perpetuity under the guise of incomplete obligations,
which the legislature clearly intended to avoid.
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22. Further, the Court finds that any interpretation of the word “period” that
allows it to be supplanted by the occurrence of a future uncertain event would
defeat the legislative intent of providing a time-bound mechanism for
conveyance. MOFA was enacted precisely to remedy the imbalance in
bargaining power between promoters and flat purchasers. To interpret Rule 9
in a manner that enables the promoter to defer conveyance indefinitely would
amount to restoring the very imbalance which MOFA seeks to correct.
23. Therefore, this Court has no hesitation in holding that the expression
“period” as used in Rule 9 must necessarily mean a fixed, determinable and
reasonable span of time. It cannot be equated with any open-ended or
contingent condition. Any clause in the agreement for sale that attempts to
override or nullify this statutory obligation must be declared void to that
extent, being inconsistent with the law.
24. In view of the aforesaid discussion, this Court is of the considered opinion
that any contractual clause, including Clause 25 of the agreement in the
present case, which seeks to defer the promoter's obligation to execute
conveyance until completion of project, is in direct conflict with Rule 9 of the
MOFA Rules. Such a clause cannot take precedence over a statutory duty.
Where the majority of purchasers have taken possession and formed a
registered society, and have complied with their obligations, the promoter
cannot avoid conveyance by raising inter se disputes or conditions involving
other purchasers. A condition based on a future uncertain event — neither
time-bound nor within the control of the society — cannot be treated as a valid
“period” under Rule 9.
Thus, a building in the layout in respect of which a society is formed
need not wait for conveyance of land till completion of layout
development.
D. Land Area either as per the Sanctioned Plan or as per Agreement,
whichever is higher.
113) In Nitin Nagarji Mehta Vs. Shree Jupiter CHSL 24, this Court
has dealt with a case where the developer had deliberately earmarked
lesser land in Section 4 Agreements for conveyance while utilizing
FSI/BUA by amalgamating other plots. This Court held that the
24
Writ Petition No. 12677 of 2025 decided on 28 July 2026
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conveyance could not be restricted only to the lands indicated in
Section 4 Agreements, but land as per the entitlement as per the
sanctioned plans must be conveyed. This Court held thus:
19) As observed above, the case involves earmarking of lesser land in Section 4
Agreements whereas buildings are constructed by utilizing FSI arising out of
larger land than the one indicated in the those Agreements. If Petitioner was to
restrict itself as per covenants of Agreements for Sale and to construct the
buildings strictly in accordance with the development permissions individually
granted to the two parcels of the land, what Mr. Gorwadkar contends could
have been right and, in such circumstances, conveyance ought to have been
strictly in accordance with the covenants of the Agreements for Sale. However,
in the present case, Petitioner got amalgamated various parcels of land and has
carried out layout development thereby utilizing much larger land from which
FSI required for construction of buildings of the two societies has arisen. In
these circumstances, conveyance cannot be restricted only to the lands
indicated in Section 4 Agreements.
20) In a given case, where the land agreed to be conveyed under the Flat
Purchase Agreement falls short of the land actually required for sustenance of
the building, it is necessary to convey the land which is taken into
consideration by the Planning Authority for construction of
the building.
114) However in a converse situation, in New Sonal Industries
Premises Ltd. Vs. District Deputy Registrar 25, this Court has held that
when lesser FSI than the one admissible is consciously utilized by the
developer, mere availability of balance FSI potential in the land cannot
be a ground for not conveying the whole plot as per the Section 4
Agreements. This Court has held thus:
26. When a covenant in the agreement to convey entire land is pitched
against the consideration of built-up area in the approved plans, the
former would prevail. This is particularly when the entire FSI potential is
not used and the promoter has made a conscious call to convey more
land than the utilised built-up area despite availability of FSI potential.
In such cases, the promoter will have to carve out or exclude any portion of the
land corresponding to the unutilised FSI from the agreement. Whether a
25
2024 SCC Online Bom 391
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promoter fails to carve out or exclude any portion of the land from purview of
the agreement and agrees to convey the entire land, mere availability of
unutilised FSI is no answer to escape the liability to convey the entire land.
However, there can be converse cases as well, where the covenant in the
agreement provides for conveyance of lesser area of land than the
utilised FSI for construction of building. To illustrate, the promoter
constructs building using 10,000 sq m built-up area with FSI 1.00 requiring
land at least admeasuring 10,000 sq m to sustain the building, but incorporates
covenant that he would convey land admeasuring only 5000 sq mt. In such a
case, whether the Society would be entitled to conveyance of land which is
required to sustain its building (10,000 sq mt) contrary to the covenant in the
agreement? In my view, though in limited remit of inquiry under Section 11 of
the MOFA, the competent authority may not be able to travel beyond the
covenants of the agreement, the civil court surely can be approached in such
cases to have conveyance of the due area of land required for sustenance of the
building. However, since this issue does not arise in the present case, the same
is left to be decided in an appropriate case.
(emphasis and underlining added)
Thus MOFA, being a beneficial piece of legislation enacted for the benefit
of the flat purchasers and their organisations and to prevent the mischief
by developers, the same is repeatedly interpreted in favour of the former
class and against the latter.
E. Impermissibility to keep open-ended reservation of future FSI for
Developer and supremacy of the statute over contractual arrangement
115) In Krishna Developers Pvt. Ltd. Vs. The District Deputy
Registrar26, it was contended that the clauses in the Agreement
preserved right of way and balance FSI for the developer. This Court held
that the private agreement cannot dilute the statutory obligations and
the contractual clauses are valid only so long as they do not defeat the
statute. It is further held that the statutory Form prescribed under the
MOF Rules does not contemplate an open-ended reservation of future
FSI in favour of the promoter once the project is completed as per the
26
Writ Petition No. 4542 of 2024 decided on 11 February 2026
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approved plans. A clause inconsistent with the statutory form and
scheme cannot be enforced to the prejudice of the society. The promoter
cannot contract out of his statutory duty. It is held thus:
12. A private agreement cannot dilute that obligation. 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. The intention of the
legislature was clear. After completion of construction in accordance with the
sanctioned plan, the promoter must step aside and transfer the property to the
collective body of flat purchasers.
13. Clause 24, which purports to reserve excess or balance FSI, directly conflicts
with this statutory position. The right to additional FSI, if any, must flow from
the sanctioned plan and applicable development control regulations. It cannot
rest solely on a contractual declaration. Moreover, the statutory Form
prescribed under the MOFA Rules does not contemplate an open ended
reservation of future FSI in favour of the promoter once the project is
completed as per the approved plans. A clause inconsistent with the statutory
form and scheme cannot be enforced to the prejudice of the society. The
promoter cannot contract out of his statutory duty.
14. As regards Clause 23, even if it records that nothing further remains to be
developed, that statement does not create an independent proprietary right in
favour of the promoter. It merely reflects the stage of construction. It cannot
be read as a device to retain ownership of the land indefinitely. Title does not
remain with the promoter merely because he inserts such a recital in the
agreement.
15. Clause 28, which speaks of a right of way, must also be tested against the
sanctioned plan and municipal records. If a right of way is shown in the
approved plan or is otherwise legally established, it will continue as a matter of
record. However, a vague reservation in a private agreement cannot override
the statutory transfer of the property. Rights that are reflected in the
sanctioned layout or in revenue records will naturally bind the society. Beyond
that, no additional or undefined right can be carved out merely by inserting a
clause in the agreement.
16. The record placed before this Court includes the sanctioned plan and the
occupation certificates. These documents show the extent of construction
actually carried out and approved by the planning authority. They define the
project as it stands on the ground. There is nothing on record to show that any
independent, surviving development right remained with the promoter after
completion of the three buildings. Once the available FSI stood consumed and
occupation certificates were issued, the promoter’s statutory duty to convey
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became absolute, subject only to what is lawfully recorded in the sanctioned
plan.
17. For these reasons, this Court holds that Clauses 23, 24 and 28 do not create
any enforceable right which can obstruct the grant of deemed conveyance.
They do not provide a legal defence against the statutory mandate under
Section 11. The promoter cannot rely upon private contractual language to
defeat a public law obligation imposed by MOFA. The claim of reservation,
therefore, fails.
116) In Kiran Builders Pvt. Ltd. Vs. Kalpita Enclave CHSL 27, this
Court, after referring to the judgment in Lakeview Developers (supra)
has held that a developer cannot put up additional constructions for
eternity on the basis of FSI made available in future, and on that ground,
avoid conveyance of the land in favour of the society. It is held thus:
31) Even otherwise, it is well settled position of law that a Developer cannot
put up additional constructions for eternity on the basis of FSI made available
in future. The issue is well settled by Division Bench judgment of this Court in
Lakeview Developers (supra) in which it has held in paras-55 to 56 as under:
55. In our view, therefore, from the aforesaid judgment, it is clear that
the developer cannot claim that he can continuously exploit the
building potential for eternity without conveying the land in favour of
the Society. The obligation to convey the land in favour of the Society
within a prescribed time and the obligation to make true and full
disclosure under Clauses 3 and 4 of Form V remains unfettered. If the
full development potential of the land is exhausted and the obligation
for conveyance of land in favour of the Society has arisen as per the Act
and Rules and if the developer fails to do so then any further benefit
which would accrue to the developer on account of any additional TDR
or FSI made available, cannot be used by him for the purpose of
construction of additional buildings. ……
xxxx
32) The principles are reiterated by this Court in its judgment in Rajkumar
Gulati (supra). Therefore, mere possibility of additional FSI being made
available in respect of the reserved land cannot be a ground for not conveying
the land in favour of Respondent-Societies.
27
Writ Petition No.9694 of 2017 decided on 18 June 2026.
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F. Principle of divesting of promoter’s title and IBC Moratorium not
affecting right to secure conveyance
117) This Court has dealt with the issue as to whether the
moratorium imposed under Section 14 of the Insolvency and Bankruptcy
Code, 2016 (IBC) can come in the way of Competent Authority exercising
jurisdiction under Section 11(3) of MOFA to grant deemed conveyance.
In Santoshkumar Motilal Bhansali Vs. District Deputy Registrar 28 and
Darshan Mandir CHSL (supra), this Court has held that provisions of
Section 14 of the IBC cannot come in the way of the Competent
Authority exercising statutory duty imposed on the promoter under
Section 11(1) of MOFA. It is further held that an action initiated by a
financial creditor against a corporate debtor under Section 7 of IBC and a
moratorium imposed under Section 14 of IBC, while admitting the
application of that financial creditor, cannot negate or even suspend the
statutory duty of the Competent Authority under Section 11(3) and (4) of
MOFA. It is further held that the statutory objective behind MOFA
cannot be permitted to be defeated merely on account of provisions of
Section 14 of IBC. As discussed above, in Darshan Mandir CHSL, this
Court has discussed the concept of divestment of title of the promoter
and has accordingly held that the freeze on assets of corporate debtor
created under Section 14 of IBC does not affect the right of the housing
society to secure conveyance as the promoter is already divested of the
title and mere formal duty of execution of conveyance remains, which is
performed by the Competent Authority.
28
2026 SCC OnLine Bom 552
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G. Deemed Conveyance in absence of Occupation Certificate
118) In ALJ Residency Co-operative Housing Society Ltd.
Vs. State of Maharashtra and Ors. 29, this Court had an occasion to
deal with the issue as to whether the Competent Authority can
exercise jurisdiction under Section 11 of MOFA to grant certificate
of unilateral deemed conveyance in respect of a building, which is
yet to be issued an Occupation Certificate. This Court referred to
the provisions of GR dated 22 June 2018, which permits conveyance
of land and building in favour of Society, whose building is yet to be
issued Occupation Certificate upon submission of a self-declaration
by the society accepting all responsibilities and liabilities regarding
the building and to make an application to the Planning Authority
for issuance of occupation certificate. The judgment in ALJ
Residency Co-operative Housing Society has been followed in
Yogesh Jayant Khadilakar Vs. State of Maharashtra30.
119) Having discussed the law enunciated in various
judgments on permissibility to grant certificate of deemed
conveyance by the Competent Authority in various situations, it is
time to revert to the core issue taken up for discussion and
resolution i.e. proportionate land division in the layout. Before
discussing various illustrative cases in which difficulties are posed
in proportionate land division in a layout, it would be necessary to
29
Writ Petition No.406 of 2018, decided on 25 November 2024
30
Writ Petition No. 13755 of 2022 decided on 11 February 2025
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deal with the submission that the Competent Authority cannot deal
with the complications involved in proportionate land division and
that it must leave the matter for Civil Court to decide.
RESOLUTION OF DISPUTES RELATING TO PROPORTIONATE LAND DIVISION IN
DEEMED CONVEYANCE APPLICATIONS RATHER THAN DRIVING SOCIETIES FOR
ADOPTION OF REMEDIES BEFORE CIVIL COURTS
120) The Competent Authority constituted under Section 5A of
MOFA and exercising jurisdiction under Section 11(3) and (4) is
undoubtedly a tribunal of limited jurisdiction. It makes a summary
inquiry under sub-sections (3) and (4) of Section 11 of MOFA while
issuing a certificate of deemed conveyance. In cases relating to single
building on a plot, the scope of inquiry before the Competent Authority
is extremely limited. It only satisfies itself as to whether there is failure
on the part of the promoter to convey his right, title and interest in the
land and the building in favour of organisation of flat purchasers, looks
into the Agreement for Sale and sanctioned plans, and makes an order
for issuance of certificate of deemed conveyance.
121) However, things get complicated while deciding applications
for deemed conveyance filed by a society whose building is constructed
in a layout land. The developers or landowners raise several defences for
somehow denying and delaying conveyance so that future development
potential can be milked. Sometimes there are other societies in the
layout who also oppose the applications for deemed conveyance.
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Therefore the nature of inquiry before the Competent Authority gets
intensified in relation to layout developments.
122) Since the legislative objective behind MOFA is to provide a
swifter remedy to the organisation of flat purchasers to secure
conveyance, mere raising of objections by developers, land owners or
other societies cannot be a reason for the Competent Authorities to shun
the responsibility and drive the parties to lengthy litigations before
Courts. The very objective behind Section 11 (3) to (5) of MOFA is that
the organisations of flat purchasers need not undertake lengthy and
expensive court litigations for securing conveyance. Decision of
conveyance suits can take years. In the present case itself, the suit filed
by Satellite Garden-I CHSL for conveyance is pending since 2010. This
also reminds me of the fact that while the principles in the Division
Bench judgment of this Court in Grand Paradi Housing Society Ltd. Vs.
Mont Blanc Properties31 are oft quoted, the suit filed by the plaintiff
society therein in the year 2002 for conveyance still remains pending.
Therefore, driving the societies to litigate before Civil Courts for securing
conveyance is not the best of the options. This Court of course is mindful
of the law enunciated by this Court in Mazda Construction Co. (supra)
and Zainul Abedin Yusufali Massawala (supra) that the Competent
Authority under the MOFA cannot adjudicate complex title disputes or
civil rights when granting a unilateral deemed conveyance. At the same
time, expecting the organisations of flat purchasers to file suits for
conveyance the moment some dispute is raised in deemed conveyance
applications by the opponents would defeat the very objective behind
31
2010 SCC OnLine Bom 608
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the 2008 amendments to MOFA. Also, the law has developed post Mazda
and the broad contours of jurisdiction of the Competent Authority to
deal with various situations through various judicial pronouncements
(as discussed above) are now well-settled.
123) Therefore, the approach of the Competent Authorities must
be to resolve the disputes relating to proportionate land division rather
than driving parties to lengthy litigations. Now that several principles
relating to proportionate land division are settled through judicial
precedents and additional principles are being discussed in this
judgment, there would be sufficient clarity for the Competent
Authorities while dealing with cases relating to proportionate land
division in a layout development. The approach must be to resolve the
disputes relating to land sharing in deemed conveyance applications and
leaving open the remedy to the aggrieved party raising complicated
issues requiring evidentiary inquiry to approach the Civil Court. By now,
it is well-settled position that deemed conveyance granted by the
Competent Authority under Section 11 of MOFA is not final
determinative of rights and entitlements of parties qua the land
conveyed and the aggrieved party can always approach civil court
claiming rights in the land contrary to the conveyance so granted. [SEE:
Arunkumar H. Shah (HUF) (supra)]. Therefore, the Competent
Authorities must attempt to resolve the disputes relating to land division
in the layout keeping in mind the statutory scheme of MOFA and MOF
Rules and the settled principles through various judicial
pronouncements.
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ILLUSTRATIONS OF DIFFICULTIES IN LAND DISTRIBUTION IN THE LAYOUT
124) Having considered the statutory scheme of MOFA and MOF
Rules and few precedents on supremacy of statutory framework of MOFA
over private contractual arrangements, it is now time to resolve the
difficulties created in conveyance of land in the layout development. It is
not that in every layout development the difficulty for proportionate
subdivision of land really arises. In most of the layout developments, this
difficulty may not even arise where the developer submits a layout plan
for approval, gets all the buildings sanctioned at one go and commences
construction and completes them within a reasonable time. There can
never be any difficulty in proportionate division of land in such cases. To
illustrate, a developer undertakes development on 10000 sq.m. land and
is required to deduct 15 % area for RG, the balance land developable is
8500 sq.m. With FSI of 1.00, he secures BUA of 8500 sq.m. which he
distributes among 4 buildings as under:
Building BUA (sq.m.)
1 1500
2 2000
3 3500
4 1500
125) If all 4 buildings are sanctioned in one plan and are
simultaneously taken up for construction and completed within a
reasonable time without seeking revision in the development
permission, there is no difficulty in proportionate land division as each
of the 4 buildings/their societies can be conveyed proportionate share in
the land and in the RG area.
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126) There can also be no problem in a situation where TDR is
loaded by the developer in the above example. To illustrate, if plot
admeasuring 10,000 sq.m. is taken up for development, out of which 15
% area is earmarked for RG and sanctioned BUA is 8,500 sq.m. based on
FSI of 1.00. There is permissibility to load TDR of 3500 sq.m. and the
developer purchases TDR and loads the same, thereby increasing his
permissible BUA upto 12,000 sq.m. He gets approved 4 buildings as
under:
Building BUA (sq.m.)
1 1500
2 2000
3 3500
4 5000
127) Even in the above example, though TDR is loaded, there is
absolutely no difficulty in proportionate land division and Competent
Authority / court can apply principle of division of land proportionate to
BUA utilised in construction of 4 buildings. In Neelkanth Mansion and
Infrastructure Pvt. Ltd. (supra), this Court has dealt with situation as
above and has held in para 16,17 and 24 of the judgment as under:
16) The objective behind prescribing the procedure for conveyance of only
plinth and appurtenant land area in respect of the layout where TDR is utilised
must be appreciated. In the layout development, all buildings may not be
constructed simultaneously and by use of same FSI. Since layout development
takes substantial time on account of phase-wise construction of buildings, it is
possible that first building is constructed in the layout by utilising the base FSI
whereas the developer may purchase TDR from the market and load the same
in construction of subsequent buildings. On account of loading of TDR for
construction of one of the buildings in the layout, the same results in FSI
imbalance and ordinarily the principle of division of land proportionate to
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built-up area utilised for each building results in a situation where the building
with TDR walks away with larger share in the land. To illustrate, if the plot
admeasuring 10,000 sq.mtrs is taken up for layout development and the
normal FSI available is 1.00, the total available built-up area (BUA) would be
10,000 sq.mtrs. The developer constructs building no.1 by utilising BUA of
5,000 sq.mtrs. The second building can be constructed with balance available
built-up area of 5,000 sq.mtrs. However, the Developer purchases TDR of 2,000
sq.mtrs and loads the same for construction of the second building and the
second building is actually constructed by utilising built-up area of 7,000
sq.mtrs. In this illustration, if principle of land division proportionate to
utilised builtup area for each building is followed, building no.1 would get
lesser share in the land whereas building no. 2 would get larger share only on
account of utilisation of TDR. To prevent this incongruous situation, para-2(C)
(vi)(2) provides a transitional/temporary solution for conveyance of only plinth
and appurtenant area. Para 2(C)(vi)(2) of the GR seeks to ensure that there is
no imbalance in the land distribution where some of the buildings in the layout
are constructed with use of TDR. This could also have been achieved by
ensuring that for land division purposes, only base FSI utilised in each building
is considered by ignoring the TDR, premium FSI, incentive FSI, etc. used in
some of the buildings. However this is not the issue to be decided in the
present case. Suffice it to observe that the objective behind prescribing
procedure under para-2(C)(vi)(2) is to provide a solution, possibly a temporary
one, to avoid unequal division of land while making an order of deemed
conveyance.
17) If all societies in the layout jointly seek conveyance or seek conveyance
in favour of the federation, entire land can be conveyed and use of TDR in
construction of some of the buildings does not pose any difficulty. However,
where layout development takes unduly long time and society formed in
respect of the completed building opts for conveyance before completion of
development in the entire layout, use of TDR for constructing other buildings
pose a problem for proportionate land division. Therefore, the GR makes a sort
of transitional solution where only plinth and appurtenant areas can be
conveyed in favour of society of each building and the final conveyance of
balance land in the layout can take place in favour of the federation or in
favour of all societies jointly. Thus para 2(C)(vi)(2) of the GR merely seeks to
provide a solution where proportionate land division is an impossibility on
account of use of TDR in some of the buildings in the layout. The legislative
intent behind incorporation of para-2(C)(vi)(2) of the GR is not to provide any
benefit to the developer or to deprive the societies of their due land
entitlement. Otherwise, in every layout the developer would deliberately use
some TDR to prevent conveyance of proportionate land and go on milking
additional FSI arising out of new Building Regulations in the unconveyed land
by putting up additional construction in the layout. Para-2(C)(vi)(2) of the GR
merely makes a transitional arrangement to surmount the difficulty faced in
proportionate land division due to use of TDR. This is the true purport of the
procedure prescribed in para-2(C)(vi)(2) of the GR dated 22 June 2018.
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24) Conspectus of the above discussion is that ordinarily the approach of
the Competent Authority must be to make an endeavour to divide and convey
land proportionate to the utilised BUA in each building in the layout. The
procedure prescribed in para-2(C)(vi)(2) cannot be mechanically applied to
deny proportionate land conveyance merely because some TDR is used in the
layout. In cases where the Competent Authority notices that use of TDR does
not pose any difficulty in proportionate land conveyance, it must grant
conveyance of proportionate land. It is only in rare cases where use of TDR or
incentive FSI in some of the buildings results in imbalance making
proportionate land division impossible that the Competent Authority can
grant conveyance of plinth and appurtenant area till the entire land in the
layout gets conveyed to the federation or to all Societies jointly. However,
under no circumstances, non-conveyance of proportionate land should work to
the advantage of the developer. Thus the first endeavour of the Competent
Authority must be towards proportionate land division. Where TDR is
distributed across many buildings the principle of conveyance of land
proportionate to the BUA utilised in each building must necessarily be
followed. In a case where TDR is used only for construction of some of the
buildings in the layout, an endeavour can be made by the Competent Authority
to examine whether BUA corresponding to only base FSI for all buildings can
be taken into consideration for proportionate land division. For example, in
illustration discussed in para 14 above, it can be examined if only base BUA of
5000 sq.mtrs. can be considered for proportionate land division by ignoring the
TDR or incentive FSI. If such solution is possible, the Competent Authority
must adopt it rather than mechanically conveying only the plinth and
appurtenant area to each building in the layout. To sum up, the procedure of
conveying land less than proportionate land should be followed only in rare
cases where it becomes impossible to divide and convey land proportionate to
the BUA utilised in each building or where application of such principle gives
undue advantage to one of the societies in the layout at the cost of other
societies.
128) The problem, however, occurs where the promoter commits
the mischief of delaying the layout development and gets the plans
revised after construction of the first or second building and secures
benefit of higher BUA either through TDR or incentive FSI or through
change in FSI regime. Here there can be multiple scenarios as under:
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Scenario 1 – Revision in the plan for the purpose of loading of TDR
Plot admeasuring 10,000 sq.m. is taken up for development and after
deducting 15 % RG area, normal permissible BUA on the basis of FSI 1.00
is 8,500 sq.m. The Developer gets the layout plan sanctioned for
construction of 4 buildings as under:
Building No. BUA (sq.m.)
1 1500
2 2000
3 2500
4 2500
The developer completes construction of Building Nos. 1, 2 and 3 with
BUA 1500 sq.m., 2000 sq.m. and 2500 sq.m. respectively. The developer
delays construction of Building No. 4, and in the meantime, the DCR
permits loading of TDR on the plot. The developer accordingly purchases
TDR of say, 3500 sq.m. and starts constructing Building No. 4 with BUA
6000 sq.m. The land entitlement of each building would be as under:
Bldg Original Original land Revised BUA Revised land
BUA (sq.m.) entitlement (sq.m.) entitlement (sq.m.)
(sq.m.)
1 1500 1765 1500 1250
2 2000 2353 2000 1667
3 2500 2941 2500 2083
4 2500 2941 6000 5000
Total 8500 10000 12000 10000
In this illustration, Building No. 4 with massive BUA of 6000 sq.m. would
virtually eat up 50 percent of the land, even though in the original
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sanctioned layout, it was supposed to consume BUA of only 2500 sq.m.
and would have received conveyance of much lesser land.
Scenario 2 – Change of FSI regime
Suppose a developer undertakes development of land admeasuring
10,000 sq.m. and he secures base FSI of 1.00 and BUA of 10,000 sq.m. He
gets the layout sanctioned for construction of 4 buildings by distributing
the BUA as under:
Building BUA (sq.m.)
1 1500
2 2000
3 2500
4 4000
Total 10000
The developer does not construct Building 4 for a considerable period of
time and new DCPR is introduced, which raises the FSI to 2.5. The
developer accordingly gets the plan revised. In these circumstances,
MCGM or any other planning authority unfortunately takes into
consideration the entire plot of 10000 sq.m. for revision of development
permission. They do not exclude the land potential, which is already
consumed, nor do they restrict additional FSI only in respect of balance
land potential. Therefore, in this illustration, the planning authority
would sanction the increased FSI of 2.5 to entire land of 10,000 sq.m. and
sanction BUA of 25,000 sq.m. The planning authority would then deduct
utilised BUA of Building Nos. 1, 2 and 3 of 6000 sq.m. and sanction
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Building 4 with BUA of 19000 sq.m. In this scenario, the original planned
development and revised development would be as under:
Building Original layout Revised layout
(sq.m.) (sq.m.)
1 1500 1500
2 2000 2000
3 2500 2500
4 4000 19000
Total BUA 10,000 25,000
In this case, the land entitlement of each building in the plot
admeasuring 10,000 sq.m. based on the BUA utilized in construction
would be as under:
Bldg Original Original land Revised BUA Revised land
BUA (sq.m.) entitlement (sq.m.) entitlement (sq.m.)
(sq.m.)
1 1500 1500 1500 600
2 2000 2000 2000 800
3 2500 2500 2500 1000
4 4000 4000 19000 7600
Total 10,000 10,000 25,000 10,000
The above table would indicate massive difference in relation to land
entitlement of buildings on account of revision to the plan by the
developer. The fourth building has eaten up the land entitlement of the
first three buildings. Thus, by mere reason of mischief played by the
developer in delaying the construction of the 4 th building and taking
advantage of change in FSI regime, the first 3 buildings suffer immensely
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in terms of their share in the land. The issue for consideration is whether
this can be permitted? The answer is in the latter part of the judgment.
Scenario 3- Mixed Use Development
Under DCR 1991 as well as DCPR 2034, there are different schemes under
which additional FSI is granted for carrying out a specific nature of
development. The incentive FSI is granted with a specific objective. To
illustrate, under Regulation 33(16) of DCR 1991, the Municipal
Commissioner is empowered to permit additional 100% FSI over and
above the one grantable in Table 14 of Regulation 32 for building of
Information Technology Establishment, which provision is now in the
form of Regulation 33(13) of DCPR 2034, which specifies incentive FSI for
the buildings of IT Establishments/data centers. Under Regulation 33(13)
of DCPR 2034, if the road width is 27 meters, FSI of 5 can be sanctioned
even though the normal FSI for similar road width is only 3.0 in the
island city and 2.5 in the suburbs. There are several other schemes for
incentive FSI such as buildings of biotechnology establishments,
buildings for the students and/or working women hostel etc. In this
illustration, even during same FSI regime, the developer revises plan
during pendency of layout development and gets the same sanctioned
for mixed use. The same results into imbalance.
To illustrate, in a plot admeasuring 10,000 sq.m., FSI 1.00 was admissible
during DCR 1991 and 2 buildings were sanctioned with BUA of 5000
sq.m. each, Building No. 1 is complete and the society is formed. The
developer delays construction of Building No. 2. Looking at the market
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demand, the developer decides to use incentive FSI for IT park or hostel
and he applies for revision in the layout plan. In this scenario also,
unfortunately, the Municipal Corporation sanctions the incentive FSI in
respect of the entire plot of 10,000 sq.m., ignoring the position that half
potential of the plot is already consumed by Building No. 1. The
developer misuses the difficulty for Planning Authority in going into title
disputes wherein it needs to consider the developer as a single owner in
respect of the whole plot and accordingly gets sanctioned the revised
plan with incentive FSI for the whole plot. Accordingly, the Municipal
Corporation sanctions 2.00 FSI for the whole plot with BUA of 20,000
sq.m. In such case, BUA used for building No.1 of 5000 sq.m. is deducted
and developer is permitted to construct building No.2 (IT park /hostel)
with BUA of 15,000 sq.m. In this scenario, if principle of land division
proportionate to BUA used in both the buildings is followed, Building
No.1 will suffer. It is clear from the following table:
Bldg. Original Original Land Revised BUA Revised Land
BUA Entitlement (sq.m.) entitlement
(sq.m.) (sq.m.) (sq.m.)
1 5000 5000 5000 2500
2 5000 5000 15000 7500
Total 10000 10000 20000 10000
129) In the above manner, revision in the layout plan for
additional construction poses difficulties in land division amongst
various buildings in the layout and the buildings constructed by revision
of layout walk away with larger pie in the layout land at the cost of
buildings constructed earlier as per the originally sanctioned plans.
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SUGGESTIONS ON BEHALF OF STATE GOVERNMENT AND BY LEARNED AMICI
130) The difficulties in the land division in the above discussed
scenarios were put forth before the learned counsel for suggestions and
for resolution and various suggestions are made by the Learned Advocate
General and by the Learned Amici. It would be apt to consider the same.
131) Dr. Sathe, the learned Advocate General has given following
suggestions to tackle the above discussed problems:
(a) Where the entire layout is developed ‘simultaneously’ under
one regime of DCR:
In this case, the entire land needs to be conveyed to the body, if
there is only one body or on pro-rata basis if there are more bodies
on the basis of BUA.
(b) That the layout is developed ‘in phases’ under one regime of
DCR:
If only one conveyance is granted to one body, then the entire land
has to be conveyed. However, if there are more bodies than one, then
here also, the land component has to be on pro-rata basis for each
society considering the entire consumed FSI including permissible
TDR.
Note: In cases (a) and (b), whether TDR is utilized or not is
immaterial.
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(c) That the layout is developed in phases ‘partly under one
regime and partly developed under another regime after
migration’:
i. The obligation of the promoter to convey the land and building
arises and crystallises in terms of Section 11 r/w Rule 9 of MOFA and
MOF Rules, respectively.
ii. For example: If one building on a plot of land is completed
consuming part FSI and balance potential of FSI is not utilized, then
in that event, the entitlement of the society has crystallised on
Occupation Certificate being received and such society ought to get
conveyance of the land component on the basis of FSI consumed.
FSI being calculated as both Base FSI and TDR regardless of the fact
that TDR has been used or not.
iii. If in future, the development potential increases because of the
change in DCR and the developer takes benefit of such increased
development potential including TDR and utilises the same on the
balance portion of the land, it would result in clear imbalance of the
plot of land and the FSI. In such a situation, the first society whose
rights are crystallised ought not to be deprived of the entitlement of
the appropriate land component based on the FSI consumed.
iv. The occupants of subsequent additional building, which is
constructed by utilisation of TDR which could be either generated
from the same plot or purchased from the market should be
informed about their building being constructed only out of TDR
and cannot claim parity with the first building.
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v. The buildings which are constructed on the basis of changed DCR
regime in which the TDR has been utilised will not be entitled to the
same treatment in view of the fact that their construction is after
some society’s rights have been crystallised and such a development
cannot be considered violating the already approved rights.
vi. The GR providing for grant of deemed conveyance to a building
which has utilised TDR, considering the plinth area and appurtenant
area, has to be construed in this background.
vii. The plinth and appurtenant area can be granted only if such
land is available after considering the entitlement of the first
building whose rights have already crystallised for a specific area.
The developer who defaults in not conveying the land to a society
whose rights have crystallised cannot be allowed to benefit from its
own wrong and take advantage of the enhanced development
potential because of change in DCR and deprive the first building of
its entitlement.
viii. The concept of appurtenant land has been explained in a
judgment of this Court in the case of Rashesh CHS Ltd. (supra). The
concept of appurtenant land has also been defined in Urban Land
(Ceiling and Regulation) Act, 1976 under Section 2(g).
ix. All these contingencies would not arise if the promoter has
obtained consents under MOFA. In such an eventuality, the
conveyance will be on the basis of the BUA (including TDR) and this
case will fall in category (a) mentioned hereinabove.
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132) Mr. Samdani, the learned amicus has indicated the following
suggestions:
I. In any layout, mixed user should not be permitted (for example -
residential + IT/Hotel/Hospital/other user), the reason being that
the permissible FSI for residential purposes is different from that
for the other user given in the example above. This may be
permitted if the layout has within itself a sub-division and the
other user is on a sub-divided plot and for construction only the
area of such sub-divided plot is taken into consideration. This
avoids imbalancing of the FSI in the context of vesting of the title
in a society/condominium. In cases where mixed user is already in
existence for conveyance, the solution may be as set out in para II
below.
II. In a layout where there are a number of buildings each one
forming a separate society and the layout has used full TDR either
in some building out of all or maybe in the last building, the total
built up area (“BUA”) should be considered to be the layout
potential. Conveyance in a situation like this can only be of the
land underneath the building and appurtenant thereto with a
covenant that the building shall be entitled to the same FSI as was
consumed from and out of the layout in the event of
reconstruction or redevelopment, with a further covenant for
incremental FSI benefits available under the DCR at the time of
redevelopment or reconstruction to be in the same percentage
which the building bore when it was constructed considering all
the buildings forming part of the layout. In a situation under
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scenario in para I above also, the mixed user building can be
granted conveyance of the land below the building and land
appurtenant thereto with a covenant that at the time of
redevelopment if the same user is permitted, it will have the
benefit of the same FSI as was consumed and if there is any
incremental benefit at the time of redevelopment it would be
entitled to the same accordingly.
III. In the event of conveyances in terms of para II above, the
remaining lands and common areas and facilities of the layout be
conveyed either to a federation of all the societies in the layout
and each society therein shall have the same percentage of interest
as defined in para II above. In the event the societies do not form a
federation, a separate conveyance jointly in favour of all the
societies with respect to the common areas and facilities be
granted. In the alternative, in the conveyance in terms of para II
above itself an undivided interest in terms of percentage in the
common areas and facilities can be conveyed to such society.
133) Mr. Godbole has also made suggestions in the Note
submitted by him to resolve the difficulties created due to TDR loading,
different FSI regimes, mixed development, etc. His suggestions are as
under:
Sr Scenario How conveyance ought to be granted
1) There are two buildings in a Both societies can be given conveyance of
common layout which are structure, land appurtenant (comprising of side
constructed from base FSI margins) and undivided share in all remaining
having equal plinth and areas.
constructed area.
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2) There are two buildings in a Both societies can be given conveyance of
common layout which are structure, land appurtenant (comprising of side
constructed from base FSI margins) in the ratio of their built up areas vis-
which have same plinth but à-vis their plot area.
different constructed area.
3) There are two buildings in a If use of TDR with specific reference either to
common layout which have the quantum or of construction of a separate
same plinth and constructed building for TDR is also disclosed (instead of a
area, however, second building general reference), then conveyance can be in
is constructed by utilizing TDR. the ratio of their built-up area vis-à-vis their
plot area.
However, if there is only a general reference to
TDR then conveyance ought to be in the ratio of
their built up area vis-à-vis their plot area and
both societies can be given 50% undivided share
in common areas irrespective of the built up
area of the TDR building being more.
4) There are two buildings in a It is really not TDR which is used but it is
common layout and one nothing but FSI used “in-situ” though the
building is constructed from Planning Authority may issue a Development
the base FSI, while the other Rights Certificate (DRC). Such a case should be
building is constructed by governed by Sr. No.1 above, i.e., both societies
utilizing FSI benefit derived can be given conveyance of structure, land
from surrender of portion of appurtenant (comprising of side margins) and
land to statutory authority. undivided share in all remaining areas.
5) There is change in regulation, If there is a very explicit, clean and
etc. due to which additional unambiguous consent for change of scheme
TDR becomes available. including the regulation which will be used (not
merely a future possibility) including in a
revised draft Development Plan pending for
sanction and only if location of purported
additional building is clearly shown on plan
annexed to MoFA agreement and described in
MoFA agreement, then alone in the ratio of their
built up area vis-à-vis plot area.
In all other cases, the second building should be
given only the conveyance of superstructure of
building and land component comprising of
footprint of the building, i.e. plinth and
compulsory side margins, i.e. land appurtenant
and only a right to use the common amenities
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or on payment of agreed contribution /
maintenance charges without any right of
ownership in such land or the building structure
of such amenities.
134) Mr. Engineer, in his Note, has made following suggestions in
the three scenarios:
Option 1
If the layout is developed / constructed by using only the base FSI which
is duly disclosed to all the flat purchasers of the entire layout, in their
respective Agreements for Sale, then in such situation, each society
forming part of the layout should be conveyed the proportionate area in
the total layout / plot area on the basis of their respective built-up areas.
Applicable formula:
“BUA utilized by the Society ÷ Total Built Up area of the Plot x Plot Size”.
Option 2
If the layout is developed by utilizing TDR, and the entire development
potential, including the full TDR, is disclosed to the flat purchasers of
the entire layout in their respective Agreements for Sale, then a
departure from Para 2(C)(vi)(2) of the GR can be permitted. In such a
situation, each society ought to be conveyed the proportionate area in
the layout on the basis of its respective built-up area, as has been held by
this Hon'ble Court in Neelkanth Mansions & Infrastructure Pvt. Ltd. vs.
DDR, Writ Petition No. 3530 of 2026, paragraph 18.
Applicable formula:
“BUA utilized by the Society ÷ Total Built Up area of the Plot x Plot Size”
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Option 3
If the layout is developed and/or constructed by utilizing TDR and/or
additional FSI which was not disclosed to the flat purchasers of the first
and/or original society or societies, then the Competent Authority must
convey the land as per the declarations/plans made and disclosed to the
flat purchasers of the first/original society. The subsequently constructed
society would only be entitled to claim the land under the plinth and the
area appurtenant thereto which comprises of the minimum open spaces
that are required to be maintained as per the planning laws. It shall be
open to the subsequently constructed society to file a suit to claim any
higher area if it believes it is entitled to it.
135) Mr. Khandeparkar has a different point of view, and he has
suggested that there can never be a straitjacket formula to lay down
uniform principles which would govern every case. Mr. Khandeparkar has
given 2 suggestions for the purpose of resolving the controversy involved
in the facts and circumstances in the present case. By way of first
suggestion, he submits that plinth area of all the buildings can be added
(10797.23 sq.m.), deduct the total plinth area from net plot area
(21807.18 – 10797.23) sq.m. = 11009.95 sq.m. and grant conveyance of
plinth area of the concerned building/society along with the
proportionate share in the balance net plot area by taking into
consideration BUA sanctioned in the last plan. Alternatively, by way of
second suggestion, he submits that proportionate share of each
building/society can be calculated based on BUA actually utilised in each
of the buildings and same can be conveyed to each building/society.
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136) Thus, on behalf of the State Government as well as the
learned amici have made several suggestions, particularly for dealing
with the cases where some of the buildings in the layout are constructed
mainly by utilising TDR. Therefore, before proceeding further, it would
be necessary to consider the concept of TDR as loading of TDR in
subsequent buildings post revision of plans in most of the cases poses
the difficulties in the land division.
TDR: MOVABLE PROPERTY, HAVING NO CONNECTION WITH THE LAND
137) The concept of TDR was introduced for the first time in DCR
1991. Regulation 34 of DCR 1991 provided that in certain circumstances,
the development potential of a plot of land could be separated from that
land itself and may be made available to the owner of the land in the
form of Transferable Development Rights (TDR). The TDR was made
available subject to the Regulations in Appendix VII. Under Appendix
VII, detailed provisions were made for generation and utilization of TDR.
Restrictions were imposed on utilization of TDR in certain areas,
including the island city. Under clause 13 of Appendix VII, DRC could be
used on plots which are already developed for erecting of additional
storeys, subject to the restriction of not exceeding the FSI stipulated in
clause 14. As pointed out by Dr. Sathe, the loading of TDR was restricted
until 2007 to maximum permissible BUA indicated in clause 14. Clause
14 earlier provided that the FSI of receiving plot could be allowed to be
exceeded only 0.4 by availing TDR. However, by notification dated 14
May 2007, clause 14 of Appendix VII was amended and the limit of
receiving plot was raised from 0.4 to 0.8. Thus, notification dated 14 May
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2007 created a bonanza for the developer where TDR was permitted to be
loaded to the extent by increasing the total FSI of receiving plot by 0.8.
To illustrate, if FSI of receiving plot was 1, the same was permitted to be
increased upto 1.8 by use of TDR. The developers started submitting
proposals for revision of plans of buildings which were already
constructed, for the purpose of adding construction thereon. This is how
increase in the cap on TDR utilization in 2007 was one of the reasons
which led to revision of several layout plans and additional constructions
are put up in the layout.
138) As provided in DCR 34, the TDR is nothing but development
potential separated from the land. It has no connection with the land on
which it is loaded. In Green Garden Apartments Co-operative Housing
Society Limited vs. Nitin Chaudhary and others 32, this Court has dealt
with the concept of TDR by treating the same as movable property. It is
held thus:
43. The judgment in Chheda Housing rendered in the context of specific
performance of contract for use of FSI cannot therefore be cited in support of
an abstract proposition that the TDR must be held to be immovable property
for the purpose of compulsory registration of an agreement for utilization of
TDR. More importantly, the judgment in Chheda Housing has been
explained in subsequent Division Bench judgment in B. Jeejeebhoy
Vakharia (supra), in which the Division Bench has held that the judgment
in Chheda Housing does not lay down a general proposition of law that
FSI is immovable property.
44. Thus apart from holding that the observations in Chheda Housing about
TDR/FSI being immovable property not constituting a binding precedent, the
Division Bench in B. Jeejeebhoy Vakharia has made an independent analysis of
the concept of TDR in the context of definition of the term ‘immovable
property’ under Section 3(26)of the General Clauses Act, 1897 and has held
that to form an immovable property, the benefits arising out of the land has to
be necessarily attached to the land or fastened to the land and until such
32
2025 SCC OnLine Bom 3623
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benefit is either attached or fastened to the land, it would continue to be an
immovable property. The moment it is detached from the land to which it
pertains to, it will cease to be an immovable property. Thus in B. Jeejeebhoy
Vakharia, the Division Bench of this Court has emphatically ruled that
since TDR is detachable from land, the same does not constitute
immovable property.
45. ….. Thus, the explanation by Division Bench in B. Jeejeebhoy Vakharia of
judgment in Chheda Housing would bind me. Consequently, TDR cannot be
held to be immovable property atleast for the purposes of Section 17 of
the Registration Act.
63. To appreciate the requirement of registration of instrument of transfer of
DRC in DCPR and UDCPR, it would be necessary to examine the very concept
of TDR, how it is generated and in what manner in can be utilized and sold.
When the land is reserved in a development plan or a regional plan for public
purposes, it becomes mandatory for Planning Authority or the Development
Authority to acquire the same. There are three modes of acquisition under
Section 126 of the MRTP Act viz., (i) by agreement of paying the amount
agreed to, (ii) grant of FSI or TDR against the area of land surrendered or (iii)
by making the application to the State Government for acquisition of the land.
64. There are twin purposes why provision is made under Section 126 of the
MRTP Act to enable the Planning Authority to offer FSI or TDR to the
landowner. Firstly, it expedites the process of acquisition and secondly it
relieves the Planning Authority of financial burden of paying monitory
compensation to the land owner. The concept of offering TDR to the land
owners in lieu of compensation was introduced by amending Section 126 of
the MRTP Act w.e.f. 25 March 1991. Simultaneously, with amendment of
Section 126 of the MRTP Act, Development Control Regulations 1991 for
Greater Mumbai came to be notified on 20 February 1991 which came into
effect from 25 March 1991. Regulations 33 and 34 and Appendix VII of DCR
1991 dealt with procedure for generation of TDR and for grant of DRC. The
DCR 1991 also provided for the manner of utilisation of TDR on same or
another land. After introduction of DCPR 2034, Regulation 32 therein governs
‘Transfer of Development Rights’. Clause 4 of Regulation 32 deals with
generation of TDR whereas clause 5 deals with utilisation of TDR. Under
Clause 6.2 of DCPR 32 it is provided thus:—
6.2 DRC shall be issued by the Municipal Commissioner as a
certificate printed on bond paper in an appropriate form
prescribed by him. Such a certificate shall be a “transferable
and negotiable instrument” after the authentication by the
Municipal Commissioner. The Municipal Commissioner shall
maintain a register in a form considered appropriate by him of
all transactions, etc. relating to grant of, or utilisation of, DRC.
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65. Thus, under the DCPR 2034, DRC issued by the Municipal
Commissioner is a transferable negotiable instrument. The Municipal
Commissioner is required to maintain a register of all transactions relating to
grant or utilisation of DRC. Thus, there is a register like a passbook, which
must contain entries of utilisation of TDR made from time to time.
(emphasis and underlining added)
139) In Abdul Aziz Bharmar & Anr. Vs. Vinod Anand 33, this
Court has dealt with an issue as to whether owner of land from which
TDR is generated has no right to claim ownership in flats constructed on
another land where the TDR is used. This Court formulated the question
for consideration in Para 1 and 10 of the judgment as under:
1. The Petition raises an interesting issue of Plaintiff's right to claim
ownership in flats constructed on non-suit land owned by a third party
by use of TDR generated from the suit land, in which Plaintiff claims
ownership. The issue arises in the light of opposition by the owner of non-suit
land to his impleadment to the suit. No doubt the TDR is generated from
the suit land in which Plaintiff claims ownership, but is the TDR akin to
immovable property and whether its utilization on another land would
mean 'transfer of right' in suit land in favour of owner of non-suit land
entitling the Plaintiff to run behind such owner and claim rights in flats
constructed in that land? TDR is capable of being freely sold and
monetized. Therefore, whether extraction of TDR from suit land and its
utilization on another land would create in Plaintiff's favour merely a
right to claim monetary value of that TDR or can he also claim
ownership rights in the flats constructed by use of such TDR? Whether
owner of non-suit land would be a necessary party to the suit because TDR
from suit land is utilized on his land? These are the issue that this Court is
tasked upon to decide in the present Petition.
10. The issue for consideration therefore is whether loading of TDR generated
out of suit land on adjoining land would entail impleadment of owner of such
adjoining land to the Suit? Also involved is the issue whether mere loading of
TDR arising out of suit land on adjoining land would entitle Plaintiff to claim
reliefs in respect of flats constructed on adjoining land on which the TDR is
loaded?
(emphasis added)
33
Writ Petition No. 3595 of 2023 decided on 03-02-2026
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140) Answering the issues, this Court held that when TDR is
detached from a piece of land and utilized on another piece of land,
it loses the characteristic of immovable property and also loses
connection with the land in respect of which the same is generated.
This Court has held in paras 16 and 17 of the judgment as under:
16. Thus, when TDR is detached from a piece of land and utilized on another
piece of land, it loses characteristic of immovable property and also loses
connection with the land in respect of which the same is generated.
17. Following the above principle, mere utilization of TDR generated out of
part of suit property cannot be a reason for impleadment of owner of the land
on which such TDR is loaded as party Defendant to the Suit. Defendant No.9
could have simply sold the TDR in the DRC to a third party, who could have
held such TDR and then allowed it to be utilized to number of persons. Mere
existence of title disputes relating to suit land cannot be a ground for
presuming that Plaintiff would have a semblance of right in the land on which
the TDR is utilized. If Plaintiff claims title in the suit land from which TDR is
generated and is aggrieved by transfer/utilization of such TDR on another
land, Plaintiff can sue Defendant for recovery of monetary value of such TDR.
Mere purchase of TDR or utilization thereof on another land would not
necessarily mean that the purchaser of TDR or owner of land, on which it is
utilized, needs to be impleaded as party Defendant to the Suit. This is because
mere loading of TDR on another land does not mean that landowner from
which the TDR is generated becomes entitled to any rights in the land on
which TDR is loaded.
Thus, in Abdul Aziz Bharmar, this Court has held that the land owner
from whose land the TDR is generated cannot claim any right in the land
in which the TDR is used. The judgment is of significance for deciding
the issue involved in the present case from the point of view of absence
of connection of building using TDR with the land on which the same is
constructed for the purpose of conveyance.
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MISCHIEF BY DEVELOPERS: A RESULT OF MANNER OF SANCTIONING OF
PLANS BY THE PLANNING AUTHORITIES
141) The genesis of the problem created in proportionate land
division in a layout for conveyance purposes is the manner in which the
planning authorities sanction the construction plans. Till the land or
part thereof is actually conveyed, the planning authorities treat the
entire plot of land as developable, ignoring the position that part of the
land is already developed. As illustrated above, when it comes to revision
of plan upon admissibility of additional FSI/BUA, the entire admissible
FSI/development potential is calculated qua the entire land, ignoring the
position that part of the land is already developed. This lacuna in the
manner of sanctioning the plans is taken advantage of by the developers
who go on adding more construction in the layout by deliberately
delaying the development of the layout.
142) When conveyance to completed buildings is delayed, the
whole plot continues to be reflected in the revenue records/property card
as belonging to the original landowner/promoter. It is only when
conveyance of part of the land is taken by the completed buildings that
the phenomenon of land cutting occurs and then the further revision of
plans can take place only in respect of unconveyed land.
143) The comparison of scenarios of incomplete layout
development where conveyance of part of land has taken place and
where no land is conveyed is indicated in the table below:
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Conveyance of land to Non-conveyance of land
completed building to completed building
Plot area 10,000 sq.m. 10,000 sq.m.
Original FSI: 1.00 FSI: 1.00
Layout BUA: 10,000 sq.m. BUA 10,000 sq.m.
sanctioned in
2000
Building No. Complete with utilisation of Complete with utilisation of
1 BUA of 5000 sq.m. BUA of 5000 sq.m.
Building No. Planned with BUA of 5000 Planned with BUA of 5000
2 sq.m. but not constructed sq.m. but not constructed
Conveyance Building No. 1 gets Conveyance is delayed to
conveyance of 5000 sq.m. Building No. 1
land
Land Promoter: 5000 sq.m. Promoter: 10,000 sq.m.
ownership Building No. 1: 5000 sq.m.
status
FSI increase FSI: 2.00 FSI: 2.00
due to
permissibilit
y to load TDR
in 2010
Revised BUA 10,000 sq.m. 15,000 sq.m.
sanctioned (balance land 5000 x 2.00 = (total land 10000 x 2.00=
for Building 10000) 20000 less 5000 used for Bld.
No. 2 No. 1)
144) Thus, in the above illustration, non-conveyance of land in
favour of Building No. 1 and the system of sanction of plans by the
planning authorities results into a bonanza for the developer who gets to
construct additional area of 5000 sq.m. just by delaying the conveyance
to the completed building. This Court has noticed cases where the
developers have either deliberately not secured OC for the last building
in the layout or where a small part of land in the layout is deliberately
left undeveloped to take advantage of future additional BUA. Thus, in a
plot admeasuring 10,000 sq.m., all the planned buildings are constructed
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and land of 100 sq.m. is deliberately shown as future development and
when additional BUA gets sanctioned, a skyscraper with massive BUA
comes up on that 100 sq.m. land by loading all the additional
FSI/incentive FSI/TDR, etc. This is the main reason why the developers
are reluctant to convey even their due portion of the land to the societies
of completed buildings.
145) This tendency can be curbed by societies by timely applying
for conveyances or by the planning authorities by altering the method of
sanctioning the development permissions. Ideally, if the portion of the
land of which the potential is already exploited is excluded while
sanctioning revised layout plan, the above mischief can be prevented.
But that is not the ambit of inquiry in the present petitions. However, the
State Government can consider modifying the development control
regulations providing for exclusion of developed part of the land while
sanctioning the revised plan.
UNDUE AND ENVISAGED ADVANTAGE TO LAYOUT DEVELOPERS VIS-À-VIS
STANDALONE BUILDING DEVELOPERS
146) As discussed above, the developers undertaking the layout
development misuse the lacuna in the sanctioning procedures of
authorities and continue milking undue advantages. On the other hand,
the developer undertaking the project of constructing a singular building
on the plot does not get these undue advantages. Once the planned
single building is constructed on the plot, usually the developer makes
exit from the plot. Even if there is delay in effective conveyance, the
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developer does not get to stand out of the same. Barring the exceptional
cases where the developers may make attempts to put in additional
floors on the constructed buildings, usually the mischief played by layout
developers ordinarily does not occur in a single building development.
On the other hand, in the layout development, the developer stays on the
plot for years if not decades. There are instances of incomplete layout
developments in Mumbai for a quarter of century. The present case is
also illustrative where the layout is still shown as incomplete despite
passage of three decades.
147) While in a single building development, any activity to put
additional construction immediately gets noticed, in the layout
development, the residents of constructed building find it difficult to
notice revision of plans and putting up of additional constructions. The
developers add floors in under construction buildings using incentive
FSI/TDR or even add a building in the layout.
148) Whether the law treats developer of a single building
differently than developer of a layout? Whether there is any intention to
shower additional benefits to the layout developments? Whether the law
has intended that layout development would have a license to endlessly
milk the future development potential in the land? Answers to all these
questions are obviously in the negative. All these additional benefits in
layout developments are outcome of mischief by the developers of not
conveying the portions of land to the completed buildings and by taking
disadvantage of lacuna in sanctioning process by the planning
authorities.
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GOVERNMENT RESOLUTION DATED 22 JUNE 2018
149) For simplifying the procedure for deciding the applications
for deemed conveyance, the State Government has issued the GR dated
22 June 2018. It lays down detailed guidelines for processing and
deciding the applications for deemed conveyance. For the purpose of
deciding the issue involved in the Petitions, the relevant portion of the
GR is reproduced thus:
(क) जि ल्हा उपनि बंधक, सहकारी संस्था / सहनि बंधक, सहकारी संस्था (जिसडको) तथा सक्षम
प्राधिधकारी यां ी मा ीव अभि हस्तांतरण प्रमाणपत्र देण्याबाबत करावयाची काय% पध्दतः-
XXX
vi) मा ीव अभि हस्तांतरणाचे आदेश व प्रमाणपत्र पारीत करता ा जि ल्हा उपनि बंधक, सहकारी संस्था/
सहनि बंधक, सहकारी संस्था (जिसडको) तथा सक्षम प्राधिधकारी यां ी खालील बाबी निवचारात घेऊ
आदेश पारीत करावेत:
(৭) एका ख ू ंडावर अ ेक इमारती असतील व प्रत्येक इमारतीची स्वतंत्र सहकारी गृहनि मा%ण संस्था
असेल आभिण त्यापैकी काही इमारतीचे बांधकाम अपूण% असल्यास, पूण% झाले ल्या इमारतीचे मा ीव
अभि हस्तांतरण करता ा अशा संस्थेच्या इमारतीच्या बांधकामाच्या प्रमाणात ागेचे क्षेत्रफळ
(Proportionate area) किंकवा Ground Coverage निकवा Plinth area, तसेच मोकळी ागा,
सामुदाधियक सेवा सुनिवधा, रस्ते यांचेवर बांधकामाच्या प्रमाणात अनिव क्त निहस्सा Undivided share)
वनिहवाटीचा हक्क द्यावा.
(२) ज्या निBकाणी निट.डी. आर. चा (TDR) वापर केला असेल अशा ले आऊट मधील इमारतींच्या
बाबतीत मा ीव अभि हस्तांतरण करता ा Plinth व Appurtenant area प्रमाणे अभि हस्तांतरण
करावे.
(३) एकाच रेखांक ात (Layout) एकापेक्षा ास्त संस्था असतील व त्यापैकी फक्त एकाच संस्थे े
असा अ % केला असेल तर, तसेच अ % दार संस्थेच्या निम ीची मो णी करण्यास इतर संस्था सहकाय%
करीत सतील तर, जि ल्हा उपनि बंधक, सहकारी संस्था तथा सक्षम प्राधिधकारी यां ी अ % दार संस्थेस
संबधिं धत संस्थेच्या बांधकामाचे काशे मं ूर करणा-या सक्षम प्राधिधकरणाकडील ामताजिलकेवरील
वास्तुनिवशारदाचे मं ूर काशाप्रमाणे मो णी करु संस्थेच्या क्षेत्राबाबत अहवाल सादर करण्यास सूधिचत
करतील.
English translation of the above part of the GR is as under:
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(C) A procedure to be adopted in respect of issuing Deemed Conveyance
Certificate by the District Dy. Registrar, Co-opera-tive Societies/Jt.
Registrar, Co-operative Societies (CIDCO) and Competent Authority:
XXX
While passing Deemed Conveyance Order and Certificate, District Dy. Registrar,
Co-operative Societies/Jr. Registrar, Co-operatives (CIDCO) and Competent
Authority should consider following matter and then pass the order:
(1) If there are many buildings on one plot and have a separate co-operative
society of each building and if construction of some of them is incomplete then
while making deemed conveyance of completed building, undivided share of
occupancy right in the proportion of construction on the proportionate area of
the construction of the building of such society or ground coverage or plinth
area, similarly open space, common services and facilities, roads should be
given.
(2) While making deemed conveyance in respect of the build-ings in the layout
where T.D.R. is utilized, their conveyance should be made according to plinth
and appurtenant area.
(3) If there is more than one society in one layout and out of them only one
society has made such application, similarly other societies are not
cooperating for conducting measurement of the land of the applicant society
then the District Deputy Registrar, Co-operative Societies, and Compe-tent
Authority shall suggest the applicant society to conduct the measurement
according to the approved plan from the Architect on the panel of the
Competent Authority who approved the constructions plans of the concerned
society and submit the report regarding area of the society.”
150) Thus, under the GR dated 22 June 2018, in a layout
development involving multiple buildings, the land can be conveyed
proportionate to the BUA utilized for construction of each building.
However, the GR also provides that where TDR is used for construction of
buildings, only plinth and appurtenant areas can be conveyed. This part
of the GR is already interpreted by this Court in Neelkanth Mansion
(supra) in which it is held that in every case where TDR is used, it is not
necessary to give a go-by to the principle of proportionate land division.
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151) However, in para 2(C)(vi)(1) and also in para-2(C)(vi)(2) of
the GR dated 22 June 2018, the words ‘plinth’ and ‘appurtenant areas’ are
used. The GR, as interpreted in Neelkanth Mansion (supra), provides that
when a difficulty arises in applying the principle of proportionate land
division, only plinth and appurtenant areas can be conveyed during the
time the layout development is incomplete and later, the rest of the land
can be conveyed to the federation or jointly to all the societies.
152) Before proceeding further, it must be borne in mind that the
GR dated 22 June 2018 is issued merely for prescribing the guidelines
and the GR, by itself, does not create any rights or liabilities, which flow
from the statutory provisions of MOFA and MOF Rules. The guidelines in
the GR dated 22 June 2018 are largely followed by the Competent
Authorities and are aimed essentially to ensure that there is uniformity
in the procedure to be followed by different Competent Authorities.
153) While the GR provides for conveyance of plinth land and
appurtenant land in case of layout development, there are difficulties
even in this arrangement, which are discussed in the paragraphs to
follow.
PROBLEMS IN CONVEYING ONLY PLINTHS OF BUILDINGS
154) The GR dated 22 June 2018 contemplates conveyance of
plinths of buildings and sometimes the Competent Authority finds it
easier to convey only the plinths of the buildings when it notices that the
proportionate land division is a difficult task. Conveyance of plinth areas
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of buildings ensures that atleast the land in physical occupation of the
buildings is conveyed and this is how the Competent Authorities find it
convenient to convey plinth areas to the buildings in the layout.
However, in some cases, conveyance of land as per plinths also results in
a situation where a building/society secures conveyance of larger land
than its due entitlement. In a given case, Building ‘A’ may be slimmer
than the Building ‘B’. Building ‘A’ may be slimmer, but may occupy larger
BUA. Building ‘B’ may occupy larger plinth, but lesser BUA. In such a
case, if principle of land division based on plinth area is followed, the
building with larger plinth but with lesser BUA would walk away with
larger share in the land as compared to the slimmer building with higher
BUA. This particularly happens in cases involving bungalows/rowhouses
and multi-storey building in a layout. Since the bungalows/rowhouses
occupy larger plinth area, but lesser BUA, they walk away with larger
share in the land thereby reducing the share of land of the multi-storey
building. Therefore, in my view, the plinth size of a building may not
always be a relevant yardstick for determining conveyance of land. Also
conveying only plinths leaves unconveyed land and here again the issue
of sharing non-plinth land crops up. Therefore, the real solution is the
land division proportionate to the BUA utilized in each building.
PROBLEMS IN CONVEYANCE OF ONLY THE PLINTHS AND APPURTENANT
LANDS
155) The word ‘appurtenant’ has not been defined in MOFA or in
MOF Rules. In fact, the MOFA does not contemplate or recognize the
concept of conveyance of appurtenant land. The concept of conveyance
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of appurtenant land is to be found mainly in the GR dated 22 June 2018
while dealing with the issue of conveyance of land in a layout. Since use
of TDR poses a problem in determining shares of land in the layout, GR
dated 22 June 2028 prescribes the procedure of conveying the plinth
areas and appurtenant areas to the buildings in the layout.
156) Though not in MOFA, the concept of appurtenant land can
be found recognised in some other enactments. Under Section 2(g) of the
Urban Land (Ceiling and Regulation) Act, 1976, the term ‘land
appurtenant’ has been defined thus:
(g) “land appurtenant”, in relation to any building, means -
(i) in an area where there are building regulations, the minimum extent of land
required under such regulations to be kept as open space for the enjoyment of
such building, which in no case shall exceed five hundred square metres; or
(ii) in an area where there are no building regulations, an extent of five
hundred square metres contiguous to the land occupied by such building,
and includes, in the case of any building constructed before the appointed day
with a dwelling unit therein, an additional extent not exceeding five hundred
square metres of land, if any, contiguous to the minimum extent referred to in
sub-clause (i) or the extent referred to in sub-clause (ii), as the case may be;
157) Thus, under the Urban Land Ceiling Act, the term ‘land
appurtenant’ means the minimum extent of land required under the
building regulations to be kept as open space for the enjoyment of such
building.
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158) The term ‘land appurtenant’ is also defined under Rule 2(h)
of the Maharashtra Housing and Area Development (Disposal of Land)
Rules, 1981 (MHADA Rules) as under:
(h) “land appurtenant” means the land which is required to be kept
open around a building, in accordance with the Development Control
Rules of the concerned Planning Authority
159) For the city of Mumbai, the ‘building regulation’
contemplated under Section 2(g) of the Urban Land Ceiling Act or
‘Development Control Rules of the concerned Planning Authority’ under
MHADA Rules is Regulation No. 41 of DCPR 2034, which provides for the
open spaces within building plot/layouts while granting conveyance of
appurtenant areas. Regulation 41(1) provides for the open spaces to be
separate for each building or wing. Regulation 41(2) prescribes the
compulsory open and marginal spaces in a Table depending on the
height of the building and the plot size on two parameters of ‘light and
ventilation’ and ‘dead wall’. Regulation 41(3) provides for relaxation in
open spaces if height of the building is restricted. Regulation 41(4)
provides that the Front Set-backs from the Street Line/Plot Boundary
and set-backs from the zonal boundary in the different zones shall be as
in Table No 18. Regulation 41(5) makes special provisions in open spaces
for plots in reconstruction/redevelopment schemes under the
Maharashtra Housing and Area Development Authority Act, 1976, Slum
Rehabilitation Authority and Redevelopment Scheme of municipal
tenanted properties. Regulation 41(6) provides for open spaces for
various types of buildings such as educational buildings, hospitals,
cinema halls, etc. Regulation 41(7) provides for relaxation of open spaces
norms for narrow plots. Regulation 41(8) provides for interior open
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spaces (chowks). Regulation 41(9) provides that the open spaces shall be
kept unencumbered.
160) Thus, even if the concept of ‘land appurtenant’ is borrowed
from the Urban Land Ceiling Act or MHADA Rules, such land only means
the land required under building regulations to be kept as open space for
the enjoyment of such building. Thus, only the marginal and compulsory
open spaces required to be maintained is the land appurtenant to a
building.
161) Therefore, mere conveyance of compulsory open spaces in
addition to plinth of the building may not always resolve the problem of
land sharing in the layout. To illustrate, if there are 5 buildings in the
layout admeasuring 10000 sq.m. and the total plinth areas and land
appurtenant of all five buildings is only 6000 sq.m., how to divide the
balance land of 4000 sq.m. still poses the question. In incomplete layout
developments, conveying only plinths and appurtenant lands would
result in a bonanza for the developer who would milk the additional BUA
on the unconveyed land by getting the plans revised multiple times and
by constructing additional structure(s). This mischief is identified by this
Court in Neelkanth Mansion (supra) where the developer was opposing
proportionate land division and was insisting for only conveyance of
plinth and land appurtenant with a view to exploit additional BUA on
unconveyed land.
162) The scope of the term ‘appurtenant area’ in the context of
provisions of MOFA and the procedure prescribed in the GR dated 22
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June 2018 is examined by this Court in Rashesh Cooperative Housing
Society Limited (supra) and it is held that in housing matters,
appurtenant land may include compulsory marginal open spaces, access
roads, passages, fire tender movement areas, common utility strips,
parking areas if earmarked, gardens or amenities linked with building
use, and other areas which by regulation are intended for occupants of
that building or group of buildings. It is further held that a promoter
cannot convey only the footprint beneath columns and staircase and
retain all open areas despite those open areas being mandatory under
building rules. This Court has held thus:
(i) Scope of ‘appurtenant area’
22. The present dispute is required to be examined in light of the provisions of
the Maharashtra Ownership Flats Act, 1963, commonly known as MOFA,
together with the applicable Development Control Regulations, layout
approval, open spaces, setbacks, access, amenities and permissible
construction. MOFA protects flat purchasers against withholding of title by
promoters, whereas the Development Control Regulations determine how land
is to be used, what minimum open spaces are compulsory, what recreational
areas are to be maintained, and what portion of land remains attached to a
building for occupation. In addition to these, reliance is also placed on the
Government Resolution dated June 2018, which has been issued for guidance
in matters of deemed conveyance and determination of land appurtenant to
buildings in layouts. Therefore, the controversy before this Court requires a
combined reading so that purchaser rights are not defeated by technical
objections by the promoters.
23. It is required to be noted that MOFA is a welfare legislation enacted with
object of controlling malpractices in sale of flats and to secure title for persons
who invest life savings in residential premises. Before such legislation, many
promoters used to construct buildings, sell flats, collect full consideration, yet
continue to retain ownership of land and common areas for indefinite period.
Purchasers were left in occupation without complete title. It is to remove such
injustice that MOFA casts binding obligations upon the promoter. Therefore,
while interpreting any provision under MOFA, the Court must lean in favour of
protecting legitimate rights of flat purchasers rather than permitting methods
by which conveyance is delayed.
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24. Section 11(1) of MOFA requires the promoter to take all steps for conveying
the right, title and interest in the land and building in favour of the co-
operative society, company or association of flat purchasers, and to execute
conveyance within the period prescribed by rules and in accordance with the
agreement for sale. The language used by the legislature show that once the
conditions contemplated by law are fulfilled, the promoter cannot postpone
conveyance on ground that he may have proposed additional construction,
possible redevelopment, or internal disputes regarding layout potential. The
words “right, title and interest in land and building” occurring in Section 11(1)
are of wide amplitude and cannot be reduced to transfer of only superstructure
standing upon land. Ownership of a building in law includes beneficial rights
necessary for its use, such as ingress, egress, open setbacks required by
regulation, utility connections, access for repairs, safety movement,
ventilation zones and such portions of land. A building stands upon land and
draws its use from surrounding spaces as required by planning law. Hence,
conveyance under Section 11 must include such land as is appurtenant.
25. The submission raised by promoters that conveyance remains suspended
till all future development in entire layout is exhausted cannot be accepted.
Section 11 does not say that statutory transfer can be postponed till promoter
uses every inch of land. If rights were reserved in agreements and sanctioned
by way of informed consent, that may stand on separate footing. But in
absence of informed consent, the duty under Section 11 remains enforceable.
Otherwise, the promoter would continue as owner while purchasers remain
perpetual consumers, which is contrary to the legislative scheme.
26. Assistance may also be taken from Section 8 of the Transfer of Property
Act, 1882, though the present matter arises under MOFA. Section 8 recognises
that unless contrary intention appears, transfer of property passes to the
transferee all legal incidents attached thereto. In relation to a dwelling house,
the land appurtenant thereto also passes with the conveyance. One does not
transfer a house while retaining those incidents without which the house
cannot be enjoyed. The expression “appurtenant” ordinarily means attached
to, belonging to, or necessary for beneficial enjoyment of the main property. It
does not always mean land touching every wall. Nor does it include unlimited
surrounding land. Its meaning depends on purpose, user, sanctioned layout,
planning norms and factual necessity. Therefore, in housing matters,
appurtenant land may include compulsory marginal open spaces, access
roads, passages, fire tender movement areas, common utility strips,
parking areas if earmarked, gardens or amenities linked with building
use, and other areas which by regulation are intended for occupants of
that building or group of buildings.
27. A promoter cannot convey only the footprint beneath columns and
staircase and retain all open areas despite those open areas being
mandatory under building rules. Such open lands are the reason why
occupation certificate could be granted. If setback, access width,
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recreational reservation or ventilation distance were necessary to
sanction the building, then such spaces cannot later be treated as
inalienable right of the promoter.
28. The Development Control Regulations become relevant for this reason.
Planning regulations prescribe minimum front, side and rear margins, distance
between buildings, internal roads, amenity spaces, Recreational Ground
reservations, parking norms, drainage corridors and other planning controls.
They define how the building can exist. Therefore, while deciding extent of
conveyance, the Court must examine sanctioned plans and applicable
regulations. Land which planning law links to the use of the building
may constitute part of the appurtenant entitlement, subject to layout
and rights of other buildings.
29. The June 2018 Government Resolution has also been placed before the
Court to indicate guidance for determining unilateral conveyance claims in
layouts comprising multiple buildings. Though such Government Resolution
cannot override statute, it can assist in implementation where ambiguity
exists. If the Resolution recognises proportionate land sharing, common
amenities, or method for identifying appurtenant areas, such guidance may be
relevant so long as it remains consistent with MOFA and rules and planning
law.
30. In the present case the issue is what land component, open spaces,
and common shares must accompany such conveyance. A conveyance of
building plinth without usable rights would defeat purpose.
31. Thus, on combined reading of MOFA Section 11(1), Section 8 of the
Transfer of Property Act, and the Development Control Regulations, this
Court is of opinion that where a building is conveyed to a society of flat
purchasers, the transfer carries with it those surrounding lands and open
spaces which are appurtenant, necessary or incidental to the beneficial
enjoyment of that building. Any contrary claim by promoter must be
established from sanctioned reservations.
(emphasis and underlining added)
163) In Rashesh Cooperative Housing Society Limited (supra),
this Court has held that transfer carries with it those surrounding lands
and open spaces which are appurtenant, necessary or incidental to the
beneficial enjoyment of that building and that conveyance of only plinth
land without the usable rights would defeat the purpose. Before this
Court, certificate of the architect of the developer was produced which
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stated that the appurtenant area of the building as 1050 sq.m. The area
of plinth of 1151.56 sq.m. was also indicated in the certificate in addition
to 19.99% share in the RG. But how this share in the RG is to be
determined is the issue. As observed above, there can be land other than
plinth, appurtenant land and RG. Since appurtenant land is restricted to
the land surrounding the building which is compulsory marginal open
space, what happens to the land beyond that limit? There can be internal
roads in the layout. What happens to that land which is over and above
plinth, appurtenant land and RG? Who would own that land? These
questions would remain unanswered if only plinth and appurtenant land
is conveyed.
164) For the above reasons, conveyance of only the plinth
and appurtenant land in the layout to each building does not
provide answer to the intricate issue of land sharing in the layout.
PRINCIPLE OF FREEZING OR CRYSTALLISATION OF LAND ENTITLEMENT
165) Having taken note of the complexities in proportionate land
division in layout developments where plans are modified successively
for the purpose of availing the benefit of higher FSI/BUA, it is now time
to find a best possible answer to the conundrum. In my view, the answer
to these complications created by the developers on account of revision
of layout plans lies in combined reading of provisions of MOFA and MOF
Rules, and a suggestion in this regard has also come from the State
Government.
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166) MOFA imposes twin duties on the developer once he
undertakes construction of a building comprising of flats. Developer’s
first obligation is under Section 10 of the MOFA, under which he must
form a cooperative society or a company within the prescribed period of
sale of minimum number of flats required for formation of
society/company. The period prescribed for formation of the society
under Rule 8 of the MOF Rules is ‘four months’. Once the promoter
discharges this obligation, the second obligation immediately kicks in
under Section 11(1) of the MOFA. Developer then needs to convey in
favour of the society/company his right, title and interest in the land and
building within the prescribed period. Prescribed period here is again
‘four months’ from the date of formation of the society/company as
provided under Rule 9 of MOF Rules. The combined effect of Sections 10
and 11 of the MOFA and Rules 8 and 9 of MOF Rules is such that the
promoter cannot delay conveyance and the same must be done within
the period prescribed.
167) If this concept of twin obligations on a promoter/developer,
discussed in the preceding paragraph, is borne in mind and followed in
each case, there may not be much difficulty even in a case where
developer commits the mischief of getting the plans revised midway for
availing benefit of higher FSI/BUA. To illustrate, when development of a
plot admeasuring 10,000 sq.m. is undertaken for construction of two
buildings each of 5,000 sq.m. and construction of building No.1 is
complete and if the required number of flats therein are sold, there is a
statutory obligation to form a cooperative society within four months.
Accordingly, the society is formed, say on 1 January 2005. Within four
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months thereafter, the next statutory obligation kicks in to convey the
title in the land in favour of the society i.e. by 1 May 2005. Thus, the
right of the first building/society to secure its proportionate share in the
land crystallises on 1 May 2005. Its land entitlement gets ‘frozen’. In this
illustration, since Building No. 1 has utilized half of the BUA sanctioned,
it must get conveyance of 50% of the layout land. Since the first
building/society is entitled to secure land admeasuring 5,000 sq.m. as on
1 May 2005, any delay on the part of developer in conveying the land
would not defeat the entitlement to secure conveyance of the frozen
portion of land of the first society/building.
168) As observed above, the concept of divestment of title of the
promoter has already taken place qua land admeasuring 5,000 sq.m. for
Building No.1 in the above illustration. What is postponed is the latter
act of vesting of title in the society. In such a scenario, the title qua the
land admeasuring 5000 sq.m. has gone away from the developer but is
yet to fall in the pockets of the society. It is in the state of limbo
temporarily. In such a case, even if developer gets the plan revised taking
benefit of his mischief in not conveying the land in favour of the Society,
the same would have no effect on the right of the first building/society to
secure conveyance of land admeasuring 5000 sq.m. As observed above,
the planning authorities unfortunately take into consideration the area
of the entire plot while sanctioning the revised permission since the
name of the original owner continues to figure in the record of rights. If
in this scenario, the promoter was to fulfil his statutory obligation and
convey land admeasuring 5000 sq.m. to the society of Building No.1, the
name of that society would get mutated in the revenue records, thereby
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restricting the right of the promoter to construct Building No.2 only qua
the balance land admeasuring 5000 sq.m. However, as observed above,
the developer takes the benefit of his own wrong and misuses the facility
available with the planning authority and gets the additional BUA
sanctioned in respect of the whole plot admeasuring 10000 sq.m. either
due to change in FSI regime, sanction for mixed user, permissibility to
load TDR, etc. Therefore, even if the planning authority sanctions higher
FSI for Building No.2 and the second building is constructed with BUA of
15000 sq.m., the proportionate land division can never be in proportion
to the BUA of 5000 sq.m. of Building No.1 and 15000 sq.m. to Building
No.2. If the sub-division of land in proportion to ‘last or revised
sanctioned plan’ (as suggested by Mr. Khandeparkar) is accepted, the
same would tantamount to reducing the land entitlement of the first
building/society without any fault on its part. Thus, if the proposition
canvassed by Mr. Khandeparkar is accepted, the same would mean that
Building No.1 would receive conveyance only of land admeasuring 2500
sq.m. though its entitlement in respect of area of 5000 sq.m. was already
crystallised/frozen in May 2005.
169) The concept of freezing/crystallisation of the land
entitlement under twin effects of Sections 10 and 11 of MOFA and Rules
8 and 9 of MOF Rules is also in tune with the legislative objective of
MOFA. There is a purpose behind prescribing the periods for
performance of the twin acts of formation of society and conveyance of
land. The legislative objective is that the organisation of flat purchasers
must become owner of the land and the developers do not misuse the
delay in conveyance for the purpose of putting up additional
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construction. As discussed above, the developer’s title in the land dilutes
with sale of each flat in a building. Even in a layout development, once
the plans are drawn up for construction of multiple buildings, and the
first building is taken up for development and all flats therein are sold,
the developer gets divested of title in the proportionate land. Mere
failure on his part to convey that proportionate land does not mean that
the developer can subject the land in which he is divested of the title for
revision of plans for securing additional built-up area in the under
construction or yet to be constructed building(s) in the layout.
170) Thus, what occurs by subsequent revision of plan is actually
stealing of rights of the organisation of flat purchasers by the developer
and loading the same on the subsequent buildings. The act of stealing is
apparent in following the illustration:
(i) In a Plot size of 10000 sq.m. with FSI 1.00, the original
sanctioned BUA is 10000 sq.m., divided in two buildings of 5000
sq.m. each. In normal circumstances, both buildings would
receive conveyance of 5000 sq.m. land each. The developer
completes construction of Building No. 1 but denies
conveyance of 5000 sq.m. land on the ground of incomplete
layout development. There is a change in FSI regime or the TDR
loading limit increases, which effectively permits construction
of 1.5 times the land area (total BUA of 15000 sq.m.). Here, both
buildings become entitled to increased BUA of 5000 sq.m. (2500
sq.m. for each building). However, by not conveying land in
favour of the first building, the developer steals the increased
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BUA of Building No. 1 and utilises it for putting up additional
construction of Building No.2 (comprising BUA of 10,000 sq.m).
(ii) Thus, what legitimately belongs to Building No. 1 is
misappropriated by the developer and encashed by delaying
conveyance of land to Building No. 1. The organisation formed
by the flat purchasers of Building No. 2 then claim land
corresponding to the BUA of 10,000 sq.m. (67% share in the
land).
(iii) If however, the legitimate entitlement of Building No. 1, as on
the date when the conveyance was due, is frozen, it would own
50% land in the layout. When the buildings are redeveloped,
Building No. 1 would regain the lost entitlement.
(iv) Thus, the principle of land freezing ensures that what
legitimately belongs to Building No. 1 is not lost.
171) In view of the above discussion, the concept of freezing of
entitlement of share in the land of each society upon completion of
statutory prescribed periods under MOFA Act and MOF Rules would
resolve the conundrum involved in cases where layout plans are revised
by the developers with a view to milk the additional FSI/BUA.
172) The above discussed principle of freezing/crystallisation has
also emerged from the suggestions given on behalf of the State
Government in the Note. For the sake of convenience, it would be apt to
reproduce the relevant suggestion made by the learned Advocate
General:
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i. The obligation of the promoter to convey the land and building arises and
crystallises in terms of Section 11 r/w Rule 9 of MOFA and MOFA Rules,
respectively.
ii. For example: If one building on a plot of land is completed consuming part
FSI and balance potential of FSI is not utilized, then in that event, the
entitlement of the society has crystallised on Occupation Certificate being
received and such society ought to get conveyance of the land component on
the basis of FSI consumed. FSI being calculated as both Base FSI and TDR
regardless of the fact that TDR has been used or not.
iii. If in future, the development potential increases because of the change in
DCR and the developer takes benefit of such increased development potential
including TDR and utilises the same on the balance portion of the land, it
would result in clear imbalance of the plot of land and the FSI. In such a
situation, the first society whose rights are crystallised ought not to be
deprived of the entitlement of the appropriate land component based on the
FSI consumed.
173) Therefore, the concept of freezing of the first plan for
conveyance purposes would be the solution to ensure that the successive
revisions in the plans do not affect the land entitlement of existing
buildings in the layout.
EFFECT OF ADDITIONAL CONSTRUCTION CONTRARY TO SECTION 7 OF MOFA
174) As observed above, the act of revision of plans for putting up
additional construction in a layout is often enacted by the developers
behind the scenes. There are blanket consent clauses in the Agreements
for Sale of flats enabling the developers to put up additional
constructions. Therefore, while one of the buildings in the layout is
under construction or where its construction is yet to commence, the
developer may get the plans revised for availing additional BUA and the
society of existing building may not even be aware of revision of plans.
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This Court has come across several instances where layout development
remains active for couple of decades and the plans are revised on
multiple occasions in those 10-20 years for availing additional BUA.
Since conveyance is not executed, the revision of plans does not require
consent of societies of existing buildings, and this is how the plans are
revised behind the back of the societies of existing buildings. While there
may be vigilant societies keeping a tap on developer’s activities, but in
majority of cases, revision in the plans goes unnoticed.
175) Also, until 2008, securing conveyance required lot of efforts,
expenses and indulgence in litigation. The conveyance suits were taking
years for decision. In the present case itself, the suit filed by Satellite
Garden-I CHSL (Suit No.1002 of 2010) seeking conveyance is pending for
the last 16 years. It is only after the provision for deemed conveyance
was introduced by the 2008 amendments to MOFA that the drive for
conveyance gathered momentum. Many societies notice the factum of
revision of plans only at the time of applying for deemed conveyance.
176) In such circumstances, if the societies whose buildings are
constructed in accordance with the original plans have not objected to
additional construction due to revision of plans, whether their land
entitlement as frozen/crystallised on account of effect of Sections 10 and
11 of MOFA and Rules 8 and 9 of MOF Rules would stand
correspondingly reduced? Whether they must face the double whammy
of tolerance of additional construction (and increased density) in the
layout as well as loss of land entitlement?
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177) Provisions of Sections 7 and 7A of MOFA are already
discussed in the preceding paragraphs. Under Section 7 of MOFA every
flat purchaser as well as the organisation of flat purchasers have a right
to ensure that no alterations are made in the flats without the consent of
flat purchaser or in the structure of the building without consent of all
flat purchasers in the building. By now the law is sufficiently developed
on the concept of ‘consent’ within the meaning of Section 7 of MOFA,
obligation to make full and informed disclosure, blanket consent being
inconsequential, etc. It is unnecessary to delve deeper into that area.
Suffice it to observe that the flat purchasers can seek injunction against
the developer if construction is being made beyond the disclosure made.
But what happens if the societies of existing buildings either do not
notice that the additional construction is contrary to the disclosure or do
not possess the wherewithal to file suit for injunction with necessary
alacrity against a mighty developer? In a given case, the court may find it
iniquitous to grant ad-interim or interim injunction on account of the
stage of construction when injunction is sought. In such a case, the
developer may complete the construction, sell flats and society is formed
in respect of the building whose construction is contrary to the
disclosure already made. The flat purchasers of earlier buildings
(constructed in accordance with originally sanctioned plans) are already
required to tolerate additional construction in the layout and share
common amenities with additional residents. Whether their land
entitlement in the layout would get reduced on account of inability to
stop the developer from putting up additional construction? The answer
to the question appears, to my mind, in the negative.
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178) MOFA does not distinguish between societies who are
diligent in applying for conveyance and those who are not and take some
time in seeking conveyance. The societies which diligently apply for
conveyance immediately after expiry of the prescribed period, secure
their due share in the layout land. Even a society which takes some time
in seeking conveyance is also entitled to same land entitlement. This is
because, MOFA does not recognise a principle that when there is some
delay in applying for convenance, what legitimately belongs to a society
is lost or is reduced. Mere delay on the part of a housing society in
applying for conveyance does not result in loss/reduction of share in the
land. This is because MOFA violations give rise to continuing cause of
action. This is discussed in the paragraphs to follow.
MOFA OBLIGATIONS GIVING RISE TO CONTINUOUS CAUSE OF ACTION
179) To answer the conundrum involved in the Petitions, it needs
to be examined as to whether it is necessary for a society to apply for
conveyance within any fixed time? MOFA obligations give rise to
continuous cause of action. The statutory right under Section 11 of
MOFA to seek conveyance does not have any prescribed period of
limitation for exercise of remedy. The right of organisation of flat
purchasers to secure conveyance does not get extinguished on account of
expiry of any particular period of limitation. In Samruddhi Coop.
Housing Society Ltd. v. Mumbai Mahalaxmi Construction (P) Ltd .34, the
Apex Court has held that MOFA obligations give rise to a continuous
cause of action. It is held thus:
34
(2022) 4 SCC 103
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20. Sections 3 and 6 of the MOFA indicate that the promoter has an
obligation to provide the occupancy certificate to the flat owners. Apart
from this, the promoter must make payments of outgoings such as ground
rent, municipal taxes, water charges and electricity charges till the time the
property is transferred to the flat owners. Where the promoter fails to pay such
charges, the promoter is liable even after the transfer of property.
21. Based on these provisions, it is evident that there was an obligation
on the respondent to provide the occupancy certificate and pay for the
relevant charges till the certificate has been provided. The respondent has
time and again failed to provide the occupancy certificate to the appellant
Society. For this reason, a complaint was instituted in 1998 by the appellant
against the respondent. Ncdrc on 20-8-2014 directed the respondent to obtain
the certificate within a period of four months. Further, Ncdrc also imposed a
penalty for any delay in obtaining the occupancy certificate beyond these 4
months. Since 2014 till date, the respondent has failed to provide the
occupancy certificate. Owing to the failure of the respondent to obtain the
certificate, there has been a direct impact on the members of the appellant in
terms of the payment of higher taxes and water charges to the municipal
authority. This continuous failure to obtain an occupancy certificate is a
breach of the obligations imposed on the respondent under the MOFA
and amounts to a continuing wrong. The appellants, therefore, are entitled
to damages arising out of this continuing wrong and their complaint is not
barred by limitation.
22.NCDRC in its impugned order has held [Samruddhi Coop. Housing Society
Ltd. v. Mumbai Mahalaxmi Construction (P) Ltd., 2018 SCC OnLine NCDRC
1711] that the cause of action arose when the municipal authorities ordered
the payment of higher taxes in the first instance. Further, the impugned order
[Samruddhi Coop. Housing Society Ltd. v. Mumbai Mahalaxmi Construction (P)
Ltd., 2018 SCC OnLine NCDRC 1711] also states that the present complaint is
barred by limitation as there is no prayer for supply of occupancy certificate.
We are unable to subscribe to the view of Ncdrc on both counts. Undoubtedly,
the continuing wrong in the present case is the failure to obtain the
occupancy certificate. Against this act of the respondent, the appellant
Society has taken appropriate action by filing a complaint before the consumer
forum. The appellant is currently pursuing the execution of the order
of Scdrc arising from that complaint. However, that itself does not preclude it
from claiming compensation for the consequences which have arisen out of
this continuing wrong. The failure to obtain the occupancy certificate has
resulted in the levy of higher taxes on the members of the appellant Society
repeatedly by the municipal authorities. Despite the order of 20-8-2014, the
respondent has failed to obtain the occupancy certificate. This has resulted in a
situation where the appellant, despite having followed the correct course of
litigation in demanding the furnishing of an occupancy certificate, will
continue to suffer the injury inflicted by the respondent merely due to the
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delay in the execution of the order against the respondent. Rejecting the
complaint as being barred by limitation, when the demand for higher taxes is
made repeatedly due to the lack of an occupancy certificate, is a narrow view
which is not in consonance with the welfare objective of the Consumer
Protection Act, 1986.
(emphasis added)
180) This Court in Sushama Tulsidas Adhav vs. Pradeep D. Shah
and Ors.35, has held that breach of statutory obligations under MOFA
gives rise to a continuous cause of action. It is held in paras 36 to 38 as
under:
36. In the instant case the Plaintiff seeks enforcement of the statutory
obligations imposed by Section 3 and 4 of MOFA. Under Section 4 of MOFA the
agreement with the flat purchaser is required to be in prescribed form i.e. Form
V prescribed by Rule 5 of MOFA Rules. It may be noted that, in that prescribed
form, there is an explanatory note which inter alia states that certain clauses
shall be statutory and shall be retained. Note 1 clarifies that a model form of
agreement has been prescribed which could be modified and adapted in each
case depending upon the facts and circumstances of each case but, in any
event, certain clauses including clauses 9 and 22 shall be treated as statutory
and mandatory and shall be retained in each and every individual agreements
between the promoter and the flat taker. Clause 9 provides for the agreement
to specify the date on which the possession of the flat shall be given to the flat
purchaser and on demand by the flat purchasers to refund the amount already
received along with interest. Clause 22 provides that the flat purchasers
agreement to be presented for registration within the time limit prescribed by
the Registration Act and imposes obligation on the Promoter to attend the
office and admit execution thereof.
37. The Plaintiff was thus seeking enforcement of Clause 9 and 22 of the Model
Agreement which are non derogable and constitutes continuing wrong till the
obligations are complied with. The reliance placed by Mr. Joshi on Clause 7 of
the Model Agreement pertaining to termination is mis placed as Clause 7 does
not find mention as being statutory and mandatory in the Note 1 to the Model
Agreement. Coming to the agreement dated 1st February, 2001 executed
between the parties in respect of Shop No. 4, there is no termination clause in
the said agreement and it appears that the absence of termination clause is for
the reason that the total consideration agreed was Rs. 10,03,460/- out of which
35
2024 SCC OnLine Bom 4325
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the plaint pleads payment of Rs. 9,10,000/- which amounts to substantial
payment.
38. The Defendant No. 1 has admittedly neither registered the agreement
executed between the parties nor specified the date on which possession is to
be handed over and has not handed over possession which amounts to a
continuous breach of obligations imposed by MOFA and is thus a continuing
wrong.
181) Since MOFA obligations give rise to a continuous cause of
action, merely because a society does not apply for deemed conveyance
immediately after expiry of period prescribed under Rule 9 of MOF Rules,
such inaction does not mean that its right to secure conveyance of the
land gets extinguished. The right to have conveyance of the
proportionate land, as frozen/crystallised upon expiry of period of 4
months prescribed in Rule 9, can be exercised at any point of time. What
needs to be conveyed when right to seek conveyance accrues must also
be conveyed when the application/suit is filed for conveyance after expiry
of few years. Therefore, mere delay in applying for deemed conveyance or
in filing a suit for conveyance would not mean that the
frozen/crystallised land entitlement would get reduced with passage of
time. The land entitlement gets frozen/crystallised for all times to come
and the remedy for its enforcement can be exercised at any time.
Additional construction put up by violating the disclosures and in
contravention of provisions of Section 7 of MOFA during the time the
first society does not apply for conveyance does not result in automatic
reduction of its land entitlement.
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WHETHER TOLERANCE SHOWN BY FIRST BUILDING/SOCIETY TO ADDITIONAL
CONSTRUCTION IN THE LAYOUT REDUCES ITS LAND ENTITLEMENT?
182) It is sought to be suggested that if the society is aggrieved by
the action of the developer putting up additional construction in the
layout, it is its duty to take steps to stall the additional construction by
the developer by filing a suit under Section 7/7A of MOFA. It is contended
that when subsequent buildings are permitted to be constructed without
any objection, the first society must accept the necessary consequence of
reduced land in the layout. It is contended that additional construction
can be out of express consent and where additional construction is an
outcome of acquiescence, there is implied consent. In either of the cases,
it is contended that the land division must happen by taking into
consideration the BUA actually utilized for all buildings in the last
sanctioned plan.
183) When there is express consent for revision of the layout,
there can be no difficulty and, in such cases, land division can be made
based on the plan to which there is a consent by previous flat purchasers.
However, can the consent be inferred by conduct? The statutory scheme
of Section 7 does not contemplate implied consent by conduct. It
requires express written consent for putting up additional construction.
Also, the words used in Section 7(1)(ii) of MOFA are ‘previous consent’.
The law in this regard is well-settled by several judgments of this Court.
184) If additional construction contrary to the disclosure made in
the first layout is without express written consent, whether mere
inaction on the part of the flat purchasers/their societies from injuncting
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the developer from putting up additional construction based on revised
plan would automatically entail reduction in their land entitlement?
Here again, the answer, to my mind, appears to be in the negative.
185) Failure to take steps to stop the developer from
constructing additional structure and thereby tolerating such additional
structure is a concept different than the concept of ownership of land. As
observed above, the right to own the land crystallises the moment
prescribed statutory period ends. This crystallised right to own the land
does not fluctuate upon subsequent revision of plans. It remains static.
The right to own a particular piece of land has already inured in the first
building/society and merely because it fails to take steps to stop
developer from putting up additional construction, it does not mean that
the crystallised right to own land is given away or is diluted in any
manner. The law does not provide for dilution of such land entitlement.
This is the reason why I have observed that the concept of tolerating
additional structure contrary to disclosed plans is different than the
concept of owning land as per the first disclosed plan. In fact, if the
principle of reduction in land entitlement on account of additional
construction contrary to Section 7 of MOFA is accepted, the same would
cause violence to the entire scheme of the Act.
186) Therefore, mere failure to file a Suit under Section 7/7A of
the MOFA to injunct the developer from putting up construction
contrary to disclosure would not result in losing title in respect of frozen
share in the land. Developer already commits a mischief of getting the
plans revised without consent and puts up additional construction. As
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observed above, many a times, the scene of getting the plans revised is
enacted behind the back of the society and its members. Many a times
they do not even know as to whether subsequent building in the layout is
being constructed as per the original disclosed plan or whether there is
any modification in the plan. The Municipal Corporation does not
require any NOC from the society at the time of sanction of the plan. In
such circumstances, it is difficult to expect the society to keep vigil on
day-to-day basis on the activities of the developer and to object to
revision of plan or to putting up additional construction. In such a
situation, the developer cannot be permitted to take benefit of his own
wrong. He has already committed twin wrongs - firstly, by not conveying
the land within prescribed period and secondly, by putting up additional
construction contrary to the disclosed plan. In such circumstances, mere
failure on the part of the first society to file a suit under Section 7/7A of
MOFA cannot be a reason enough for holding that such society would
lose its entitlement in the ownership of the land which is already
crystallised / frozen upon expiry of the twin periods prescribed under
Sections 10 and 11 of the MOFA.
JUDGMENTS SUPPORTING FREEZING/CRYSTALLISATION CONCEPT
187) There have been some judgments of this Court which do
tend to suggest that the share of constructed building in the plot/FSI
cannot get reduced with every revised sanctioned plan. It would be apt to
make reference to some of those judgments.
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188) In Malad Kokil CHSL vs. Modern Construction Co. Ltd. and
Ors.36, a coordinate Bench of this Court took note of the folly committed
by the developer by loading TDR for the purpose of additional
construction without conveying the land in favour of the society. As
pointed out by Dr. Sathe, the concept of TDR was introduced for the first
time in DCR 1991. However, its loading was restricted until 2007 to
maximum permissible BUA indicated in Table 14 under Regulation 32.
Regulation 34 provided that development potential of plot of land can be
separated from the land itself and can be made available to the owner in
the form of TDR, which can be loaded in another plot. Appendix VII of
DCR 1991 included regulations for grant of TDR. Clauses 1 to 9 of
Appendix VII provided for generation of TDR and clauses 10 to 19
provided for utilisation of TDR. Clause 14 earlier provided that the FSI of
receiving plot could be allowed to be exceeded only 0.4 by availing TDR.
However, by notification dated 14 May 2007, clause 14 of Appendix VII
was amended and the limit of receiving plot was raised from 0.4 to 0.8.
Thus, notification dated 14 May 2007 created a bonanza for the
developer where TDR was permitted to be loaded to the extent by
increasing the total FSI of receiving plot by 0.8. To illustrate, if FSI of
receiving plot was 1, the same was permitted to be increased upto 1.8 by
use of TDR. The developers started submitting proposals for revision of
plans of buildings which were already constructed, for the purpose of
adding construction thereon. The State Government took note of this
folly and issued notifications dated 7 December 2007, relevant portion of
which reads thus:
36
2012 SCC OnLine Bom 1310
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74. …
It is brought to the notice of the Government that, while sanctioning plan in
the beginning from the Planning Authority for development of any land by the
Developer, at that time no inclusion of T.D.R. use therein and after completion
of some construction, then the Housing Society is formed. But the conveyance
deed was not made in the name of society with structures thereon. Thereafter,
again Developer demands permission for amalgamation of surround area with
vacant plot and the construction was made on that site without taking
approval of the Housing Society or Plot holder and T.D.R. of said land was
utilized on vacant plot and carried out construction of multi storied
building. Therefore, the right of plot holders are affected. Now, the
Government is giving direction to all Municipal Corporations and all other
planning authorities having provisions of T.D.R. as per Section 154 of the
Maharashtra Regional and Town Planning Act, 1966 as follows.
DIRECTION
1. While granting building permission along with use of T.D.R. by all Municipal
Corporations and other Planning Authorities having provision of T.D.R., T.D.R.
of all land should be permitted in the ratio of balance potential area of the
concerned Housing Society without permitting at same place.
2) The said order is in force immediately for the date of this Government Order.
(emphasis in original)
189) In Malad Kokil CHSL (supra), this Court took note of this
folly committed by the developers and held that the increased limit for
use of TDR could only be applicable for land which is ‘vacant’ and which
is not already constructed. This Court thus froze the land which is
already constructed and prevented loading of TDR on the same.
190) In Eternia CHSL and Ors. Vs Lakeview Developers and
Ors.37, the learned Single Judge of this Court took note of the ratio of
judgment in Malad Kokil (supra) and held in paragraph 75 as under:
75. As Gavai J notes in paragraph 55 of Malad Kokil, this limits and restricts the
TDR potential to such land as is vacant, not already constructed. If this be so,
then there is no question of the Hiranandanis having both TDR for the
37
2015 SCC OnLine Bom 723
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Societies' buildings and inherent FSI available. It follows, therefore, that if the
inherent FSI is, prima facie, shown to have been exhausted, there exists no
‘vacant land’ that is properly ‘developable’ : its FSI has already been consumed.
Mr. Kapadia is, therefore, correct in saying that the developers must be held to
the development potential shown, without the TDR; they cannot
retrospectively load this TDR and change the very basis on which construction
of the Societies' buildings and Galleria was completed.
191) The order in Eternia CHSL (supra) was challenged before
the Division Bench of this Court in Lakeview Developers and Ors. vs.
Eternia CHSL and Ors.38 While dismissing the Appeal, the Division
Bench held in paragraph 65 as under:
65. From the layout charts which have been shown to use, it can be seen that
prima facie the Plaintiffs have made out a case that the entire consumable FSI
has already been consumed after 10th building was constructed. The additional
FSI and TDR which was utilized for construction of last two buildings was
made available to the developer from the road set back area and other
amenities which were provided and out of that these 10 buildings have been
constructed. Prima facie, promoter/developer has not been in a position to
show that the buildings were constructed out of additional TDR such as Slum
TDR or TDR which is purchased by the developer. The development potential
therefore, prima facie, in our view, has been fully consumed after the
10th building was constructed and, therefore, even otherwise,
promoter/developer was under an obligation to convey the land in Sector IV-A
in favour of the Societies.
192) Thus, in both the judgments of the learned Single Judge as
well as of the Division Bench, in Eternia CHSL and Lakeview Developers,
it is held that once development potential is fully consumed, there was
an obligation on the developer to convey the land in favour of the
Societies. This follows that mere sanction of additional FSI/TDR by the
notification of 2007 did not defeat the right of the building already
constructed to have conveyance of the entire land. Though judgments in
38
2015 SCC OnLine Bom 3824
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Eternia CHSL and Lakeview Developers (supra) are rendered in the
context of provisions of Sections 7 and 7A of the MOFA, the same
underscore the point that mere revision of a plan for putting up
additional construction does not destroy the frozen right of the society
to have conveyance of its entitled share in the land.
193) The concept of freezing of the first layout plan is also
recognised to some extent by the coordinate Bench of this Court in
Mahanagar Realty (supra), in which it is held in paragraph 22 of the
judgment as under:
22. The share of the constructed buildings in the plot area/FSI gets reduced
with every revised sanctioned plan and if building AB goes for re-development
in future, then considering the reduced plot area, the FSI may not be sufficient
to sustain re-development. It is therefore necessary to freeze the FSI as per
the sanctioned plan after some of the buildings in the layout are
constructed for purpose of grant of deemed conveyance, which is what is
sought to be achieved by the Government Resolution of 22nd June, 2018.
The Competent Authority has rightly considered the sanctioned plan of the
year 2018 which was placed before it for consideration and applied the GR of
22nd June, 2018 for calculating the proportionate share in the plot to be
conveyed.
(emphasis and underlining added)
194) Thus, in Mahanagar Realty, this Court has emphasised the
need to freeze the FSI as per the sanctioned plan after some of the
buildings in the layout are constructed for the grant of deemed
conveyance, which is the purpose which is sought to be achieved by the
GR dated 22 June 2018.
195) In Gala Complex Premises Cooperative Society Ltd. (supra),
this Court has held that when the building uses FSI of the entire land,
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the land corresponding to that construction must also be determined
proportionately and that such exercise ensures that the society gets land
corresponding to the construction which already exists. More
importantly, this Court has held that promoter cannot retain land of
which development potential has already been used for construction of
the building of the Society. It is held that once the FSI of larger plot has
been used to construct the building, the purchasers of the flats therein
obtain a corresponding interest in the land which supports that
construction. This Court held in paragraphs 23 and 29 as under:
23. It is important to understand that the Resolution clarifies how the existing
entitlement should be worked out in a rational way. When the building uses
the FSI of the entire plot, the land corresponding to that construction must
also be determined proportionately. The Resolution cannot be treated as
interfering with vested rights of parties. When the sanctioned plan and
municipal documents show that the building has used the development
potential of the entire plot, applying this formula becomes logical. It ensures
that the society gets land corresponding to the construction which already
exists.
29. Respondent No.1 has also argued that granting larger land to the society
would amount to taking away the promoter’s remaining land. At first sight this
argument may appear persuasive. However on closer examination it does not
hold good. The purpose of MOFA is to protect flat purchasers who invest their
life savings in purchasing homes. At the same time the law does not ignore the
rights of the promoter. The balance lies in recognising that the promoter
cannot retain land whose development potential has already been used for
constructing the society building. Once the FSI of the larger plot has been used
to construct the building occupied by society members, the purchasers obtain a
corresponding interest in the land which supported that construction. The
promoter is still free to develop the remaining property according to law. But
that development must respect the fact that part of the development potential
has already been utilised for the society building.
196) Again, in Nook CHS Ltd. (supra), this Court has
emphatically held that the latter plan cannot be permitted to cut down a
right which has already arisen from the original arrangement unless
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three elements are clearly shown viz. clear disclosure, informed consent
and proper sanctioned basis. This Court has held that a latter sanctioned
plan may be relevant but cannot supersede statutory obligations owed at
an earlier stage. This Court has held in paragraphs 25, 26, 27, 28 and 32
as under:
25. This Court finds that the later plan cannot be permitted to cut down a
right which had already arisen from the original arrangement unless
three elements are clearly shown. First, there must be clear disclosure to the
purchasers. Second, there must be informed consent. Third, there must be
proper sanctioned basis. In present matter, these elements are not established
in the impugned order.
26. Turning now to the respondents' defence, it was contended that the project
was disclosed in stages and that agreement dated 9-10-2018 mentioned total
net area of 28,110.16 square meters and total potential area of 51,160.49
square meters. It was also urged that the agreement specified three phases, of
which Phase I alone had then commenced. On this basis, respondents submit
that purchasers were put to notice regarding overall development potential. A
mention of potential figures in an agreement is one circumstance, but not
complete answer under MOFA. Numbers alone do not disclose the real scheme.
Purchasers need to know where future construction may arise, its scale, impact
on amenities, open spaces, access, density, common facilities and relation with
their own building rights. Mere insertion of large figures without specific
project particulars may amount to formal notice, but not full and true
disclosure contemplated by Act.
27. The learned counsel for Respondent 1 further submitted that because
potential area was disclosed, the competent authority rightly relied on
sanctioned plan of 2020 while determining proportionate area. A later
sanctioned plan may be relevant, but it cannot supersede statutory
obligations owed at earlier stage. If later plan differs from earlier disclosed
scheme, the authority must first determine whether such change is
permissible. Without that enquiry, mere existence of later plan cannot
justify reduction in conveyance area. The Act requires informed consent.
Purchasers cannot be assumed to have agreed to every variation because some
vague development potential was mentioned. In Malad Kokil Cooperative
Housing Society it has been stated that promoter must place the whole scheme
before purchasers, and if later construction is not in accordance with the layout
shown at the time of agreement, prior consent becomes necessary. That
principle answers the respondents' argument. The issue is whether the
development now relied upon by respondents formed part of the originally
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disclosed scheme governing the purchasers and the society. On present record,
that burden has not been satisfactorily discharged by Respondent 1.
28. When rights of conveyance are to be curtailed, the scrutiny must be strict. A
society once formed represents collective rights of all flat takers. Such rights
cannot be reduced by inference. For these reasons, the petitioners' challenge
gains force.
32. Liberty to represent also cannot mean liberty to ignore binding precedents
such as Jayantilal Investments and Malad Kokil Co-operative Housing Society.
Those decisions continue to apply to the promoters and flat takers under
MOFA. Liberty cannot override law unless stated so in the order. The promoter
must make full disclosure of the entire project. Consent cannot be presumed
from vague clauses. Additional development beyond disclosed scheme requires
legal justification. These principles stand unaffected by the respondents'
version of the Supreme Court orders. Hence, the said orders do not assist the
respondents in sustaining impugned order. The judgment in Jayantilal
Investments declares that the promoter's duty of disclosure remains unaffected.
The entire project, whether one building scheme or multiple building scheme,
must be placed before flat takers at the time of agreement. It further indicates
that residual FSI or development potential cannot be treated lightly. The
decision in Malad Kokil Co-operative Housing Society holds that if construction
is not part of the layout disclosed to purchasers, prior consent is necessary.
(emphasis and underlining added)
197) Thus, the judgment of the coordinate bench in Nook CHS
Ltd. is a direct authority on the concept of crystallisation and freezing of
land entitlement based on earlier plan and ignorance of the plan for
conveyance purposes which does not have consent. This Court has
emphatically ruled that a later sanctioned plan may be relevant, but it
cannot supersede statutory obligations owed at earlier stage. It is further
held that if later plan differs from earlier disclosed scheme, the authority
must first determine whether such change is permissible and that
without such enquiry, mere existence of later plan cannot justify
reduction in conveyance area. The judgment is also illustrative on the
issue of inquiry to be conducted by the Competent Authority about
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existence or otherwise of a consent. Thus, the judgment of this Court in
Nook CHS Ltd. is a direct precedent on the issue of later plan not
resulting into reduction of land entitlement crystallised as per the earlier
plan.
198) Thus, this Court has repeatedly emphasized the principle
that there is crystallisation/freezing of land entitlement of the buildings
constructed in accordance with the original sanctioned plan and mere
revision in the layout plan does not result in automatic reduction in land
share of the buildings constructed as per the earlier sanctioned plan.
LAND DIVISION AS PER BUA SANCTIONED FOR EACH BUILDING IN THE
ORIGINAL SANCTIONED PLAN
199) In my view therefore, it is necessary that conveyance of the
land in the layout is done on the basis of the first sanctioned plan or at
least on the basis of the plan which is sanctioned at the time when
freezing occurs i.e. when twin effects of Sections 10 and 11 of MOFA
trigger. This means that if the plan is revised before the twin obligations
occur, such revised plan can be considered for land division. Upon
formation of the society and upon expiry of period of four months,
freezing occurs and the sanctioned plan at that time would alone
determine the proportionate share of each building in the land. This
would ensure that the legislative objective of MOFA is fulfilled and the
folly/mischief committed by the developers does not affect the land
entitlement of buildings constructed in accordance with the originally
sanctioned plans.
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200) Conveyance on the basis of the plan sanctioned as on the
date of triggering of obligation to convey land to the first building would
ensure that rights of flat purchasers of that building are not trampled
upon by the flat purchasers of the subsequent building. To illustrate, if a
plot admeasuring 10,000 sq.m. is taken up for layout development and
on the basis of FSI of 1.00, the BUA of 10,000 sq.m. is sanctioned, which
is divided as under:
Building No. 1 : 5000 sq.m.
Building No. 2 : 5000 sq.m.
The moment period of 4 months expires after formation of cooperative
society in respect of Building No. 1, its right to have land admeasuring
5000 sq.m. crystallises/stands frozen. Even if the developer delays
construction of Building No. 2 and applies for revision of plans by
loading TDR of 3000 sq.m. with increased BUA of 8000 sq.m. for Building
No.2, the same would not affect the crystallised/frozen land entitlement
of Building No. 1 of 5000 sq.m. In such a case, even if Building No. 2 is
constructed with BUA of 8000 sq.m., it will have to remain satisfied with
the land admeasuring only 5000 sq.m. This is dealt with in greater details
and better illustration in the latter part of the judgment.
DENIAL OF SIMILAR TREATMENT TO BUILDING LOADED WITH ADDITIONAL
BUA DUE TO REVISION IN PLAN
201) This Court is aware of the difficulties that may be faced by
the last or subsequent buildings in the layout on account of the mischief
played by the developer by revising the plans by loading TDR or by taking
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benefit of new scheme or of change of FSI regime. As observed above, if
the developer does not commit the mischief and conveys the land within
the prescribed period and conveys proportionate land to the first society,
his right to avail additional FSI/incentive BUA automatically gets
restricted only to the balance portion of the land. In such circumstances,
land cutting (notional) occurs. The land cutting may be notional in most
of the cases since there are common amenities in the layout such as RG,
internal roads, etc, which cannot be physically subdivided. Thus, once
proportionate land is conveyed to the society of the first building in the
layout and if the developer desires to go for revision in the plan to avail
incentive FSI/TDR, sanction of such incentive FSI/TDR would get
restricted only in respect of the unconveyed portion of the land, and this
process does not result in additional development rights inuring to the
benefit of already constructed building being transferred to the
developer for being utilized on proposed buildings. This concept is
recognised by this Court in the judgment rendered in ACME Enterprises
(Suit judgment of 2025 Supra) in which it is held as under:
80. In my view, application of the methodology of ‘land cutting’ or
‘proportionate land segregation’ applied above, would provide an answer to the
above conundrum. When a society, construction of whose building is complete,
seeks conveyance of proportionate land in the layout and once the land
entitlement of such society is determined and conveyance is executed and
registered, conveying a portion of land in the layout, such society need not be
concerned with what the developer does in the balance portion of the land in
the layout, subject to the disclosure restrictions. When a portion of land in the
layout is conveyed in favour of a society, it becomes owner of that portion of
land and loses all rights in respect of balance land in the layout. Upon
acquisition of ownership of portion of land in the layout, such society is
entitled to develop or redevelop the conveyed portion of land. The issue is
whether such society, who has secured ownership of part of land in the layout,
can restrain the developer from constructing disclosed buildings in the layout,
by availing the benefit of change in FSI norms/policy? The answer to the
question appears to be in the negative.
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81. The main reason why developers oppose conveyance of any portion of land
in favour of completed buildings till completion of entire development in the
layout is because the FSI computations in respect of the layout are always done
on the whole of the land in the layout and this system benefits the developers
to a large extent. Let us take the illustration of developer undertaking layout
development in land admeasuring 10,000 sq. mtrs, in which the developer has
planned construction of 4 buildings. First three buildings are constructed with
basic FSI 1.00 and each building has utilized built-up area of 2500 sq. mtrs
each, leaving only 2500 sq. mtrs of FSI balance for the fourth building. The
developer does not convey land to societies of those 3 buildings by citing the
pretext of incomplete development of the layout. By the time, the fourth
building is taken up for construction, new DCR is introduced permitting higher
FSI 2.00. The developer submits the revised plan for sanction by making FSI
computation in respect of the entire layout of 10,000 sq mtrs and secures
sanction for total built-up area 20,000 sq. mrts. He then deducts the utilized
builtup area of 7500 sq. mtrs and constructs the fourth building with builtup
area of 12500 sq. mtrs. This is how non-conveyance of any land in the layout
enables the developer to milk the additional FSI generated due to change in
the norms/policy. On the other hand, in the above illustration, the society of
three completed buildings secure conveyance of proportionate land of 7500 sq.
mtrs and the developer is left with ownership of only balance land of 2500 sq.
mtrs, even if he takes benefit of the increased FSI norms and applies for revised
building permission for 2500 sq. mtrs land, he would be sanctioned built-up
area of only 5000 sq. mtrs for the fourth building. Thus, the difference between
the two scenarios is that in the former case (non-conveyance of any land),
fourth building is constructed with built up area of 12500 sq. mtrs whereas in
the latter case, the fourth building has less built-up area of 5000 sq mtrs.,
though the developer is permitted to take benefit of increased FSI in both
cases. In the former case, the developer would profiteer by utilizing the
additional FSI, whereas in the latter case, both society and the developer would
proportionately share the additional FSI. The present case is similar to the
latter scenarios, where portion of land can be conveyed in favour of the
Federation (15402.20 sq. mtrs) and the remaining portion (3200 sq. mtrs)
would remain in the ownership of the Developer and both the Federation and
Developer can proportionately share the additional FSI arising out of DCPR
2034.
202) Once the land cutting (even on a notional basis) occurs on
account of conveyance of proportionate share in the land in favour of
first society, the developer is free to utilise the additional/incentive
FSI/TDR on the balance portion (subject to disclosure under Sections 7 and
7A of MOFA). However, when a mischief occurs and the developer does
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not convey the land within the prescribed period to such society and he
is benefited of his own folly, and secures additional/incentive FSI /TDR
on the entire plot and loads the same on the subsequent building(s),
application of concept of freezing of land entitlement upon expiry of
prescribed period may cause some inconvenience to the purchasers of
flats in the subsequent buildings. They or their organisation may get
lesser share in the land than the BUA actually utilised for construction of
their building(s).
203) To illustrate, if the concept of freezing of land entitlement is
applied to a case where the first building is constructed with BUA of
5,000 sq.m. and the second building is constructed with BUA of 15,000
sq.m. (on account of additional/incentive FSI/TDR of 10,000 sq.m.) and the
plot admeasuring 10,000 sq.m. is divided by conveying area of 5,000
sq.m. to the first building, only balance area of 5,000 sq.m. would be left
for the second building. The second building has used BUA of 15,000
sq.m. But it needs to be content with land admeasuring only 5000 sq.m.
If the concept of freezing of land entitlement is not applied, Building No.
2 would get land of 7500 sq.m. thereby eating into the share of Building
No.1. This is illustrated below:
Bldg. Original If land was BUA as Entitlement Land
BUA as per conveyed per as per entitlement
the First in revised proportionat as per
plan (sq.m.) ‘prescribed Plan e land freezing
period’ (sq.m.) division concept
(sq.m.) (sq.m.) (sq.m.)
No. 1 5000 5000 5000 2500 5000
(construction
complete &
society formed)
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No. 2 5000 Balance plot 15000 7500 5000
left of 5000 (incentive
sq.m. FSI or TDR
is loaded)
The above illustration would indicate that the application of concept of
crystallisation/freezing of land entitlement, when Building No. 1 became
entitled for conveyance, ensures that the Building No. 2 does not eat into
the land entitlement of Building No. 1.
204) It is sought to be contended that construction of Building
No. 2 in the above illustration would be rendered illegal because it may
not have requisite land for its sustenance. Here, I would like to clarify
that while dealing with the concept of conveyance/deemed conveyance,
the question of validity or legality of construction does not arise. Once
building plans are sanctioned, building is constructed and Occupation
Certificate is received, mere non-conveyance of proportionate land does
not ipso facto render the construction of such building illegal. It
continues to be a legal and valid construction. All that may happen is the
entitlements of flat purchasers of such subsequent building would get
reduced when it comes to redevelopment of the building. When
redevelopment of the building is undertaken, every member of the
society expects a larger home/unit. This may or may not be possible in
case of a subsequent building, which is constructed by use of incentive
FSI/TDR. However, the expectation of flat purchasers of building
constructed by revision of plans by using incentive FSI/BUA or TDR
cannot trample upon the land entitlement of building whose land
entitlement was crystallised/frozen.
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205) However, the lawmakers have ensured that when
redevelopment of such subsequent building (which does not have
ownership of proportionate land) takes place, the new building is
reconstructed with at least the BUA equivalent to the existing BUA. This
is in the form of Regulation 30(C) of DCPR 2034, which provides thus:
(C) Protected Development
(a) The FSI permitted as per Table No. 12 will be allowed to be exceeded for
redevelopment of existing authorized building to the extent of existing
authorized development rights/BUA and shall be also entitled for the
additional FSI as per relevant regulations.
Provided further that in cases where benefit of additional FSI as per the then
prevailing regulations was availed for the purpose of educational, medical,
starred category hotels, religious development and Information Technology
establishments and if redevelopment is proposed by discontinuing such users,
then such additional BUA will not be protected. The development shall have to
be in consonance with the provisions of these Regulations. The premium paid
in past for such user will not be adjusted.
(b)In cases where development is not completed, it shall be permissible to avail
the balance development rights as permissible under these Regulations by
utilizing the TDR or additional FSI on payment of Premium by adjusting the
payments made earlier for availing FSI if any, or payments made for grants of
any concessions, Provided that if the development is proposed to the extent of
protected built-up area only as per a) above, 9 m road width shall be considered
adequate. However, if development is proposed with more area than protected
as per regulation then, the restrictions as per regulation 19(2) shall be
applicable.
206) Thus, in the buildings where the maximum sanctionable
FSI/BUA falls short of the existing BUA, DCPR 30(C) ensures that an
additional FSI is granted to ensure that building of the same size
(equivalent BUA) is reconstructed. In that sense, flat purchasers of
subsequent building constructed with use of incentive FSI/TDR will not
suffer in the matter of redevelopment of their buildings. They would get
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flats in size equal to what they already have. Only aspect is that they
have to live with a reality that the members of society whose building
was earlier constructed as per originally sanctioned plans, may receive
larger sized flats in redevelopment process and they have to be content
with the flats of same size as they occupy in the existing building. This is
not discrimination amongst two sets of flat purchasers, but protection of
rights of the buildings which are denied their due share in the land by
delaying the conveyance.
207) Therefore, by reason of declaration of law in this judgment,
the existing building, which does not receive conveyance of
proportionate land, does not get declared illegal or unauthorised. Even
when it comes to redevelopment, Regulation 30(C) ensures that requisite
quantum of additional FSI, as may be necessary to put up reconstruction
of at least the existing BUA, is sanctioned.
208) It must be observed that the history has indicated only
northwards movement in the FSI. With acute shortage of space in the
urban areas, the FSI has gone upwards with passage of time. In DCPR
2034 for Mumbai and in UDCPR for other cities, there is already a
substantial increase in the FSI. In DCPR 2034, there is massive increase
in the base FSI. To illustrate, in Mumbai the island city, where road width
available is 27 meters and above, as against base FSI of 1.33 during 1991
DCR regime, FSI now available is 3.00. In the suburbs, FSI for plots with
road-width of 27 metres has gone up from 1.00 to 2.50. With this trend, I
do not find much difficulty for the flat purchasers of subsequent
buildings (whose buildings are constructed with use of incentive FSI/TDR by
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revision of plans) in redeveloping their buildings. They may get lesser
additional area than the members of the society of first building, but that
is a reality with which they need to live since their building is
constructed by trampling upon the rights of the first building/society.
Their building is allowed to stand, which can be directed to be
demolished by a civil court, if violation of provisions of Sections 7 and 7A
of MOFA is demonstrated. However, merely because existence of
subsequent building is tolerated by the flat purchasers of first
building/society, it does not mean that the building which is constructed
by eating into the rights of the first building/society would earn a
premium over illegality already committed, by permitting stealing of the
land meant to be conveyed to the first building/society.
209) In my view therefore, no real difficulty is posed in following
the principle of crystallisation/freezing of land entitlement upon expiry
of statutorily prescribed periods under Section 11 of the MOFA and
under Rule 9 of the MOF Rules. Here, one must also bear in mind the fact
that under Section 4 of the MOFA, the developer makes disclosure of the
sanctioned plans. Thus, a flat purchaser of subsequent building becomes
aware of the fact that building has come up largely through incentive
FSI/TDR. This being the position, I do not find much difficulty in
existence of two classes of societies/associations in the same layout viz.,
(i) societies whose buildings are constructed as per originally sanctioned
plans and (ii) societies whose buildings are constructed by revision of
plans by use of TDR/incentive FSI. The folly committed by the developer
in eating away the FSI meant for first/earlier building by getting the
plans revised cannot be a reason for equating both the classes of
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societies for determining proportionate share in the layout land. As
observed above, if both the societies are placed on the same pedestal for
conveyance, the subsequent societies would earn a premium over
illegality already committed in their construction (in the sense of their
construction being contrary to the first disclosed plans).
CASES INVOLVING CONSENT
210) It is not that in every case the plans are revised behind the
back of already constructed buildings. There may be cases where the
developer has secured written consent from the society of building
already constructed as per originally sanctioned plan for effecting a
revision therein for availing additional BUA. In some cases, the existing
societies may have monetized their right of giving consent by securing
consideration in the form of money or additional facilities and may have
given consent for revision in the plan. In such cases, whether the concept
of land freezing/crystallisation as on the date of formation of the first
society can be applied? In my view, the answer is in the negative. Where
there is express consent by the flat purchasers/societies of earlier
buildings for revision of plans for construction of subsequent buildings,
the freezing/crystallisation concept cannot apply. Where such express
written consent is given, land division can be undertaken on the basis of
subsequently revised plan, which has such consent. However, in every
case where such express consent is not given, proportionate land
division must necessarily be on the basis of the first sanctioned plan or
at least the sanctioned plan which was in existence at the time of
application of concept of freezing.
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211) It is contended that Competent Authority being a tribunal of
limited jurisdiction cannot go into the issue of existence of consent.
There can be no dispute about this proposition and since existence or
otherwise of the consent, being a matter of intrinsic evidentiary inquiry,
the Competent Authority would not have jurisdiction to decide that
issue. However, in its summary jurisdiction, if the developer or society of
subsequent building produces a consent letter/affidavit, I do not see
much difficulty in the Competent Authority in acting on the same and
assuming that there exists a consent for undertaking the exercise of
proportionate land division. If a competing society has any contrary
claim, the same can always be taken for adjudication to the Civil Court as
the order of deemed conveyance passed by the Competent Authority is
not final determinative of rights and entitlement of parties qua the land
conveyed. On the other hand, if no prima facie written evidence of
consent is produced, the Competent Authority can proceed on the basis
of absence of consent and apply the principle of freezing/crystallisation
of land entitlement as per the plan in existence at the time of expiry of
the prescribed period under Section 11 of MOFA and Rule 9 of MOF Rules
for the first society. In such a case, the developer/society of latter
building can approach the Civil Court to establish existence of consent.
In my view therefore, though the Competent Authority may not be able
to resolve the issue of existence or otherwise of consent but can make an
adjudication on the basis of prima facie existence/absence of material to
indicate consent. I am supported in my view by the judgment of this
Court in Nook CHS Ltd. (supra).
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EQUITY OR LAW?
212) It is suggested by Mr. Khandeparkar that the buildings
constructed majorly/purely by utilising the TDR are no less than the
buildings constructed by utilising inherent FSI. He has relied on
Regulation 30 Table 12 of DCPR 2034, which states that the term
‘permissible FSI’ or the ‘development potential’ includes (i) zonal (basic)
FSI, (ii) additional FSI on payment of premium, and (iii) admissible TDR.
According to him, law does not create any distinction between buildings
constructed with inherent/base FSI and TDR. He therefore suggests that
such discrimination cannot be introduced while granting conveyance to
various buildings in the layout and that therefore the Competent
Authority must accept the ‘last sanctioned plan’ for the purpose of
proportionate subdivision of the layout land. I am unable to agree. As
discussed above, permissibility under the building regulations to put up
additional construction is a concept different than the concept of
conveyance of proportionate land. Building regulations may permit
additional construction on a plot of land, but for putting such additional
construction, written previous consent of flat purchasers is necessary. As
held above, mere inaction on the part of the society of earlier building(s)
in not objecting to additional construction does not result in dilution of
their crystallised share in the layout land, which was already frozen upon
expiry of the ‘prescribed time’. Therefore, for conveyance purposes, the
buildings constructed with incentive FSI/TDR as a result of revised plan,
which does not have consent, cannot be put on the same pedestal as that
of the buildings constructed as per the originally sanctioned plan.
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213) This Court is also alive to the situation where some or one of
the buildings (mostly the last building in the layout) may have been
constructed mostly/purely out of TDR. Application of the principle of
land freezing/crystallisation discussed above may possibly leave no land
for such building for conveyance purposes. I must say that such cases are
rare, and would be difficult to handle qua conveyance rights. No building
can come up purely on TDR. For loading of TDR, some land in the layout
is required. In normal cases, TDR is utilized by adding the BUA flowing
through the Development Rights Certificate (DRC) to the base/inherent
BUA. Therefore, it is ordinarily impossible to construct a building
without any land. For conveyance purposes, it has to be assumed that the
TDR is loaded on the inherent BUA flowing through some part of the
land. Therefore, such portion of land can be identified and conveyed to
the society whose building is constructed mainly by utilizing TDR.
214) As observed above, TDR is a transferable movable asset
capable of being hoarded, monetized and freely transferable. It has no
connection with the land in the receivable plot. If some land is required
in receivable plot for loading of TDR, how a building can ever come up
purely through TDR? If any building in the layout is an outcome of pure
TDR, this again is an outcome of mischief of developers. The layout
development is deliberately left incomplete by not securing occupancy
certificates of buildings and when TDR loading limit increases, the layout
is demonstrated to the Municipal Corporation as incomplete (for
indicating availability of land for loading of TDR) and the TDR is loaded for
construction of an additional building. The planning authorities act
mechanically and since land is shown available in the incomplete
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project, they allow loading of TDR in the layout and this is how some of
the buildings may have come up in the layout without much land left for
being conveyed. Such cases are rare, but may exist. Majority of cases
however are where lesser land becomes available for conveyance than
utilised BUA on account of TDR/incentive FSI.
215) Can Court treat all the buildings in the layout on the same
pedestal for conveyance purposes as sought to be suggested by Mr.
Khandeparkar? Though the last building may have been constructed by
violating provisions of Section 7 of MOFA, but since the innocent flat
purchasers have purchased flats after verifying the construction
permission, can principle of equity be followed to accommodate the
building constructed mostly/purely out of TDR by conveying to it the
proportionate land? Or whether the Court needs to uphold the true spirit
of MOFA by ensuring that the building constructed as per originally
sanctioned plan must receive conveyance of the land which was due to it
as per MOFA? I would tend to lean in favour of the latter proposition.
Adoption of the former proposition (for accommodating rare cases of pure
TDR buildings) may cause violence to the legislative object of MOFA and
would amount to turning the provisions of the Act on its head.
216) Equitable considerations cannot prevail over the statutory
scheme of MOFA. As observed above, if Section 11 of MOFA crystallises
the entitlement of the first building in respect of a particular area of land
in the layout, that lawful area entitlement cannot be reduced by applying
equitable consideration for accommodating rights of buildings which are
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constructed contrary to provisions of Section 7 of MOFA by revising the
plans subsequently for loading of TDR/incentive FSI.
217) Therefore, in extremely rare cases where there is very little
or no land left for being conveyed to the buildings erected out of pure
TDR, the societies of such building can purchase some land from the
other societies in the layout for redevelopment of its building and then
take the benefit of DCPR 30(C) for securing the requisite additional FSI
for reconstruction of same BUA.
218) As observed above, conveyance of land in the layout on the
basis of the ‘last revised plan’ would cause violence to the statutory
framework of MOFA and mere equitable considerations cannot be the
basis for denying to the societies their lawful land entitlement merely
because they could not stop the developer from revising the plans and
putting up additional construction in the layout. One must bear in mind
the larger impact of grant of conveyances based on the ‘last revised plan’.
There may be very few or minuscule number of cases where the entire
building is constructed only by utilizing TDR. But majority of cases
involve use of TDR/incentive FSI for putting up additional construction
than originally planned. Various illustrations discussed above and the
facts of the present case would depict how use of TDR in subsequent/last
building results in massive increase of BUA thereof. If the principle of
grant of conveyance based on ‘last revised plan’ is followed, there would
be a windfall gain or a bonanza to the societies of those buildings, who
would walk away with large pie in the land at the cost of societies whose
buildings are constructed as per the originally sanctioned plans. Hence,
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land division on ‘last plan principle’, far from resu organizlting in equality,
would actually create discrimination by making societies whose
buildings are constructed with massive TDR entitled to grab the highest
share in the layout land. Thus, for protecting the interests on equitable
considerations of very few buildings constructed by utilizing only TDR,
the Court cannot violate the objective and scheme of MOFA by offering
to them on a platter a larger share in layout land at the cost of buildings
constructed as per the plans existing at the time of expiry of the
prescribed period.
THE WAY FORWARD
219) The cases involving FSI/BUA imbalance occur mainly due to
the manner in which the planning authorities sanction and revise the
plans in the layout. Since conveyance of proportionate lands was not
granted by the developers, they/original land owners continued to
remain owners and for the planning authority, the layout development
continued to remain incomplete. Therefore, the increased FSI/BUA got
sanctioned by the planning authorities for whole of the land in the
layout and by deducting the BUA already used for construction of
existing buildings, the developers loaded the entire additional
FSI/BUA/TDR on the subsequent buildings. The flat purchasers are
unaware of the effect of this phenomenon, especially in the context of
land entitlement of their society. The mischiefs played by the developers
would ultimately affect the flat purchasers of the buildings constructed
by use of TDR/incentive FSI due to revision of plans.
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220) Some suggestions are made by the learned AG and the
learned amici for protecting the interests of flat purchasers henceforth.
221) Dr. Sathe has suggested that if in future, the development
potential increases because of the change in DCR and the developer
takes the benefit of such increased development potential, including
TDR and utilises the same on the balance portion of the land, in such a
situation, the occupants of subsequent additional building, which is
constructed by utilisation of TDR, should be informed about their
building being constructed only out of TDR and cannot claim parity with
the first building.
222) Mr. Samdani has suggested that in any layout, ‘mixed user’
should not be permitted, meaning thereby that on the same layout there
should be prohibition of construction of buildings for use as residential +
IT/Hotel/Hospital/other user. The reason for this suggestion is that the
permissible FSI for residential purposes is different than the other users.
He has suggested that the mixed user may be permitted if the layout has
within itself a sub-division and the other user is on a sub-divided plot.
The suggestion means that if the layout is taken up for development for
construction of residential and commercial buildings with normal FSI
and after construction of one or two buildings in the layout, the
developer changes his mind and decides to apply for incentive FSI for IT
Park, Hotel, Hostel or Hospital, such development should not be allowed.
Alternatively, the planning authority should insist on sub-division of the
plot by carving out the land meant for conveyance of buildings already
constructed and sanction the incentive FSI only in respect of balance
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undeveloped land. This is an important suggestion which would ensure
that the developers do not secure massive BUA for incentive use like IT
Park/Hospital/Hostel/Hotel, etc. in respect of the entire layout land, but
use the same only on the last building in the layout. This would be for
the planning authorities to consider as this Court is not dealing with
challenge to the Development Control Regulations and the issue here is
restricted to only laying down principles for dividing the layout land for
conveyances.
PRINCIPLES FOR CONVEYANCE OF LAND IN LAYOUT DEVELOPMENTS
223) From the above discussion, following principles emerge:
(a) The right to secure conveyance of the land and the
building inures in favour of the organisation of flat purchasers
upon expiry of the period prescribed in Section 11 of the MOFA
read with Rule 9 of MOF Rules.
(b) Consequently, in a layout development, the
proportionate land which was meant to be conveyed in favour of
an organisation of flat purchasers, as on the date of expiry of
period of four months from its formation, stands crystallised and
frozen and shall not get reduced merely on account of subsequent
revision of the plans.
(c) The conveyance or deemed conveyance of land in a
layout development by undertaking the exercise of land division
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proportionate to BUA used in construction of each building shall
be on the basis of either the first sanctioned plan or the plan
sanctioned as on the date when freezing/crystallisation occurs i.e.
when the period specified under Rule 9 of the MOF Rules expires.
(d) The above principle shall however be subject to an
exception where the flat purchasers of earlier buildings/their
societies have given a written consent for modification/revision of
the plan, in which case, the exercise of proportionate land division
can be undertaken by taking into consideration the plan, which
has such consent.
(e) The Competent Authority accordingly needs to convey
the proportionate land to the societies in a layout by taking into
consideration the sanctioned plan, which existed at the time when
the time prescribed under Rule 9 of the MOF Rules had expired
from the date of formation of organisation of flat purchasers or the
plan which has the written consent as discussed above, whichever
is later.
(f) If the developer or any other organisation of flat
purchasers in the layout are aggrieved by land division as
discussed above and are able to demonstrate land entitlement to
the contrary, they need to file a suit questioning the land conveyed
by the Competent Authority. A society seeking conveyance of land
by application of principle of freezing/crystallisation need not be
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driven to Civil Court for seeking conveyance of the proportionate
land.
(g) Developers and promoters shall give adequate notice to
the flat purchasers about construction of the building by use of
incentive FSI / TDR having and the potential risk of securing lesser
land as compared to BUA used in construction of their building(s).
CONVEYANCE OF LAYOUT LAND IN THE PRESENT PETITIONS
224) Applying the above principles to the case in hand, it is seen
that the first building constructed in the layout is that of Satellite Garden
I CHSL, which is formed and registered on 11 October 2002. The
Occupation Certificate of the building Satellite Garden I CHSL was
apparently issued on 9 August 2001. The sanctioned plan as well as the
Occupation Certificate dated 9 August 2001 are the basis of area of sub-
plot A of about 16855.47 sq.m. However, it appears that the layout and
subdivision of the plots therein have undergone changes on several
occasions as under:
Date of Layout Sub-Plot A area Sanctioned BUA
(sq.m.) (sq.m.)
29 May 1997 16855.41 16895.63 (available)
12671.72 (used)
29 July 2003 16566.90 17081.86
8 June 2004 20948.16 20805.94
25 November 2004 21807.18 21587.60
10 March 2005 21807.18 21587.60
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225) Thus, the rejigging of the Plots has changed the area of sub-
plot No. A from time to time. In the rearrangement of the sub-plots, the
area of sub-plot No. A finally became 21807.18 sq.m.
226) I have gone through all the rearranged layout plans. In the
final layout plan dated 10 March 2005, 6 proposed buildings and a
clubhouse is shown, out of which apparently Building No. 1 was shown to
have received OC, plans for Building Nos. 2 to 5 were shown to have been
‘sanctioned’ and the plans for Building No. 6 were shown as ‘not
approved’.
227) Therefore, the present case involves a peculiar situation in
which the plot itself has undergone change in size. The demand of
Satellite Garden I CHSL is for conveyance of land on the basis of OC plan
dated 9 August 2001 and it accordingly seeks conveyance of land
admeasuring 16855.47 sq.m. However, even in the OC Plan dated 9
August 2001, the total BUA sanctioned for original Sub-Plot No. A was
12671.72 sq.m, which was divided between Building No. 1: 9866 sq.m.,
Building No. 2: 2653 sq.m., Building No. 3: 285 sq.m. and Building No. 4:
285 sq.m. Therefore, the whole land of 16855.47 sq.m. could otherwise
not have been conveyed to Satellite Garden-1 CHS even if there was no
rearrangement of the sub-plots. Also, what is finally used in construction
of building of Satellite Garden-1 CHS is BUA of 11186.41 sq.m. This is a
reason why I have observed that the case involves peculiar circumstance,
where the plot size itself underwent a change making it impossible to
divide the land in the originally sized sub-plot A (16855.47 sq.m). The
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division of land has to be in respect of the rearranged sub-plot A which is
now sized 21807.18 sq.m.
228) In my view therefore and in the light of the principles
discussed above, the conundrum in the present case can be resolved by
directing conveyance of land based on the Layout Plan dated 10 March
2005. The Layout Plan dated 10 March 2005 does not indicate use of any
incentive FSI/TDR. The BUA calculated for land area of 21807.18 in the
layout plan dated 10 March 2005 is as under:
Net Plot Area 21807.18
Reduction for 15% RG area 3271.08
Balance area 18536.10
Addition for FSI:
Setback Area 3051.50
Total area 21587.60
Permissible Area for FSI 1.00 21587.60
Thus, for plot sized 21807.18 sq.m., BUA of 21587.60 sq.m. was
sanctioned while approving the layout on 10 March 2005.
229) Mr. Kakalia has placed on record the OC Plan for Building A-
4 dated 9 July 2010 for indicating the distribution of BUA of 21587.60
sq.m. However the OC plan dated 9 July 2010 indicates use of massive
slum TDR raising the sanctioned BUA from 21587.60 to 40343.28 sq.m.
Hence as per the principles discussed above, the figures of distribution of
BUA of 40343.28 sq.m. cannot be taken into consideration for
determining the land distribution amongst the four buildings. The OC
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Plan of 9 July 2010 is therefore irrelevant for deciding the proportionate
land division.
230) In my view therefore, the proportionate land division in the
present case needs to be done by following the principle of freezing
based on Layout Plan dated 10 March 2005 by taking into consideration
the BUA excluding TDR used for construction of each of the buildings
indicated in the plans reflected as sanctioned in that layout. Mr. Kakalia,
has placed on record the figures of BUA distribution amongst each of the
buildings as under:
Building A-1: 11186.41 sq.m. [Satellite Garden Phase I]
Building A-2: 3126.32 sq.m. [3936.32 – 720] [Sadguru AB]
Building A-3: 328.74 sq.m. [Not completed]
Building A-4: 830.92 sq.m. [3917.76 – 3086.08] [Sadguru CD]
Building A-5: 5778 sq.m. [20728.06-14949.6] [Satellite Tower]
231) However, Building No. 3 has not been constructed yet, for
which an insignificant area of 328.74 sq.m. is reserved. The developer has
already increased the density of flats in the layout by subsequent
revision of plans by use of massive slum TDR. The layout is shown as
incomplete for the last 29 long years. If the layout is still shown as
incomplete and if the layout plan is permitted to be further revised as
per DCPR-2034 , there might be further increase in the BUA for the
entire plot which the developer may load while constructing building No.
3. Mr. Kakalia has fairly submitted that the developer is no longer
interested in putting up any additional construction in the layout and
that some areas in the layout are reserved for the landowners. It appears
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that in the OC plan of 9 July 2010, significant BUA admeasuring 244.31
sq.m. is shown for temple. But the plan dated 9 July 2010 is prepared on
the basis of loading of slum TDR due to revision and is wholly irrelevant
for deciding the land distribution. In my view, time has come to put a full
stop on any further development in the layout and the entire land in the
layout needs to be distributed only amongst the four buildings which are
standing today. Both the developer as well as the original land owners
(having already milked undue development potential in the layout land)
need to be thrown out of the land. Therefore, there cannot be any land
reservation either for the fifth building (Building No. 3) or for the temple.
Even if the temple may physically exist in the land, the land beneath it
would fall in the ownership of one of the four societies.
232) The certificate of deemed conveyance issued in favour of
Sadguru Complex -1 (CD) CHS is based on architect’s certificate dated 23
May 2025, who has made the calculations based on the revised
sanctioned plan dated 9 July 2010, in which massive slum TDR got
loaded on buildings of Sadguru Complex-1 (CD) and Satellite Tower
CHSL. As discussed above, the land distribution cannot be based on the
plan dated 9 July 2010. The certificate of deemed conveyance dated 31
October 2025 based on revised plan dated 9 July 2010 is thus
unsustainable and deserves to be set aside. Similarly, the certificates of
deemed conveyance issued conveying only plinth areas to Satellite Tower
CHSL and Sadguru Complex 1 (AB) CHSL are also liable to be set aside.
Instead, the working of division of land needs to be done based on the
BUA sanctioned for each of the buildings in plans reflected on layout
dated 10 March 2005.
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233) Mr. Engineer has highlighted one concern in undertaking
this exercise. He has submitted that if the principle of land division
proportionate to BUA utilised on the basis of base FSI is applied in the
present case, buildings of Sadguru Complex 1 (CD) CHSL would receive
lesser land than its actual plinth. Mr. Engineer has accordingly
highlighted that Sadguru Complex 1 (CD) CHSL would receive only land
admeasuring 866.08 sq.m. when in fact its plinth is 968.77 sq.m.
However, this Court is not following the principle of land division based
on base FSI concept. Instead, it is being directed to take into
consideration the BUA figures indicated in the plans reflected in the
Layout dated 10 March 2005.
234) In any case and in my view, the difficulty of a building
receiving land lesser than its plinth alone cannot be a reason for not
applying the principle of freezing as this difficulty can easily be
surmounted. What is done is only the notional sub-division of the land,
mainly for the purpose of redevelopment of buildings in the layout. In
the layout, it is not always possible to physically divide the land because
of spreading of amenities, internal roads, etc. throughout the layout.
Therefore, even if any building/society receives conveyance of land less
than its plinth, at the time of redevelopment, the size of the plinth can
be reduced and building can go vertically for the purpose of utilising
entire FSI/BUA potential available at that time. This can typically happen
in case of societies of row houses/bungalows. Since the row houses and
bungalows occupy larger plinth but lesser BUA as compared to a tower in
the same layout which occupies lesser plinth but much larger BUA, while
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undertaking redevelopment of such row houses/bungalows, the plinths
of the redeveloped subcultures can always be readjusted as per the
proportionate land entitlement in the layout.
235) In my view therefore, the unique conundrum of land
distribution due to change of the area of land of Sub-Plot A can be
resolved on a reasonable basis by taking into consideration the BUA
figures in the sanctioned plans which existed at the time of layout plan
dated 10 March 2005 and by ignoring the BUA figures of OC plan dated 9
July 2010. Instead of leaving the matter for speculation as to which plan
existed as on 10 March 2005 and in the facts of this case, the figures of
approximate BUA distribution of 21587.60 sq.m. indicated by Mr. Kakalia
can be taken into consideration for proportionate land division amongst
the four societies without reserving any land for Building A-3 or for the
temple. The BUA for each society to be taken into consideration of land
division is as under:
Satellite Garden Phase I: 11186.41 sq.m.
Sadguru AB: 3126.32 sq.m.
Sadguru CD: 830.92 sq.m.
Satellite Tower: 5778 sq.m.
Total BUA: 20921.65 sq.m.
This Court is conscious of the fact that the total of the above BUAs of the
four buildings falls little short of the sanctioned BUA of 21587.60 sq.m.
for Sub-Plot A. However, the Architect needs to apply a reasonable
formula for undertaking the exercise of distribution of the land by taking
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into consideration the above BUA figures. This can be done by adding the
BUAs indicated above and determining the percentage share of each
building in such sum total and by then applying such percentage for
dividing the land in the layout. The Competent Authority shall
accordingly procure a fresh certificate from the architect for division of
the land in Sub-Plot A by taking into consideration the above BUA for
each building. Mr. Aniket Mathakar, Architect, who had issued certificate
to Sadguru Complex-I (CD) CHSL on 23 May 2025 (which is found to be
erroneous) shall accordingly prepare and submit a fresh certificate by
distributing the entire area of Sub-plot No. A based on the above BUAs
for each of the building.
236) Before parting, this Court places on record its deep sense of
appreciation for the able assistance rendered by Mr. Samdani, Mr.
Godbole, Mr. Engineer, Mr. Khandeparkar and Mr. Tamboly, the learned
amici curiae. The Court also places on record appreciation for Dr. Sathe,
the learned Advocate General for assisting the Court in determining the
principles for proportionate sub-division of land in a layout.
Appreciation is also deserved by Mr. Kakalia who has not only been
neutral throughout the hearing despite appearing for a developer, but
has also assisted the Court in placing on record the statistical data of
complex BUA and FSI figures as well as several old plans requested by the
Court from time to time. Without the able assistance of the learned
counsel who have appeared in the Petitions, it would not have been
possible for the Court to resolve the intricate issue relating to
proportionate land division amongst organisations of flat purchasers in a
layout land.
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16 September 2026
Neeta Sawant WP 1128 of 2026 and group
ORDER
237) In view of the above discussion, I proceed to pass the
following order:
i. Impugned orders passed by the Competent Authorities dated
31 October 2025 in Application No.153 of 2025 filed by
Sadguru Complex 1 (CD) CHSL, Order dated 16 May 2024
passed in Application No.138 of 2023 filed by Satellite Tower
CHSL, and Order dated 6 March 2025 in Application No.22 of
2025 filed by Sadguru Complex 1 (AB) CHSL are set aside.
ii. Application Nos.153 of 2025, 22 of 2025 and 138 of 2023 are
remanded to the Competent Authority for fresh
adjudication.
iii. The Competent Authority shall procure a fresh Certificate
from Mr. Aniket Mathakar, Architect who shall indicate the
land distribution of the entire area of Sub-Plot No. A
(21807.18 sq.m.) based on the BUAs for each of the building
indicated in and as discussed in para 235 above.
iv. While re-adjudicating the applications, the Competent
Authority shall bear in mind the principles laid down in the
judgment and shall proceed to determine land entitlement
of each of the societies by taking into consideration the
certificate of the Architect as directed above.
PAGE NO. 169 of 170
16 September 2026
Neeta Sawant WP 1128 of 2026 and group
238) With the above directions, all the three Writ Petitions are
disposed of. There shall be no order as to costs.
[SANDEEP V. MARNE, J.]
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2026.09.16
19:50:36
+0530
PAGE NO. 170 of 170
16 September 2026
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