Bombay HC Upholds Society’s Right To Deemed Conveyance, Rejects Promoter’s Apex Clause Delay
Court Says Postponing Title Transfer Via Federation Clause Violates Flat Owners’ Statutory Rights Under MOFA
In a key ruling dated May 9, 2025, the Bombay High Court dismissed a writ petition filed by developers in Haresh Vijaysinh Bhatia and Ors. vs. District Deputy Registrar, Co-Operative Societies & Ors. (Writ Petition No. 4704 of 2025), affirming the legality of unilateral deemed conveyance and limiting promoters’ power to indefinitely postpone title transfer under the Maharashtra Ownership Flats Act, 1963 (MOFA).
The case arose from a residential project in Navi Mumbai, where the petitioners (promoters) had entered into agreements with flat purchasers in 2018. The agreements included a clause delaying conveyance until formation of an apex society for the full layout, covering multiple buildings. Although one building was completed and occupied by 2023, federation registration stalled due to disputes among other owners.
The housing society representing purchasers sought deemed conveyance under Section 11 of MOFA, which the District Deputy Registrar granted in 2024, transferring title for the completed building’s 2,200 sq. m. plot. The promoters then approached the High Court, claiming the decision violated their Article 300A property rights and would fragment the project, hindering future redevelopment.
Court’s Reasoning
The High Court rejected the petition, ruling that Section 11 of MOFA overrides private contractual clauses that delay or deny conveyance once a building is completed and the society is registered.
Citing Lok Everest CHS Ltd. vs. Competent Authority (2025 SCC OnLine Bom 711) and Flagship Infrastructure Ltd. vs. Competent Authority (2025 SCC OnLine Bom 1240), the bench held that linking conveyance to apex society formation is “mala fide and contrary to MOFA’s welfare intent.” Such clauses, it said, cannot indefinitely withhold ownership from flat purchasers who have fully paid for their homes.
The Court clarified that deemed conveyance enforces a statutory right, not arbitrary deprivation of property. The promoter’s Article 300A challenge failed because sale consideration from buyers extinguishes any ownership claim over the conveyed portion.
Evidence of tampering in the society’s register (dated March 3, 2025) further discredited the promoters’ defense, indicating attempts to fabricate apex society progress. The court thus upheld the Competent Authority’s swift action.
On redevelopment, the ruling underscored that title transfer empowers societies to undertake self-redevelopment or partner with new developers without promoter interference — consistent with Maharashtra’s 2019 Government Resolution on Self-Redevelopment.
Court’s Orders
- Deemed Conveyance Upheld: The Competent Authority’s order granting title to the society was confirmed.
- Registration Directed: Sub-Registrar to execute and register conveyance within 30 days.
- Promoter Rights Limited: Any promoter claim over undivided shares post-conveyance stands quashed.
- Costs Imposed: Promoters to pay ₹3 lakh to the society for litigation delays, earmarked for structural audits.
- Apex Disputes Segregated: Federation-related issues to be handled under Co-operative Societies Act proceedings, not MOFA.
Broader Significance
The verdict curtails developers’ long-standing tactic of using “apex society clauses” to delay title transfer and control layouts. It reinforces that flat purchasers’ ownership rights prevail over contractual fine print when conveyance is unreasonably postponed.
By clarifying that partial or building-wise conveyance does not disrupt unified redevelopment, the judgment will affect hundreds of multi-building projects across Navi Mumbai, Thane, and Pune, encouraging developers to decouple conveyance from federation registration.
Legal experts view the decision as a milestone in strengthening MOFA’s pro-consumer intent, ensuring that societies can secure title and initiate redevelopment without being held hostage by promoter delays.
