Bombay High Court Clarifies Deemed Conveyance Rules: Tax Clearance Invalid, Safety Certificate Mandatory
Prabhu Niwas Society Wins Partial Relief in Landmark Self-Redevelopment Case Linking MOFA and RERA
In a significant judgment shaping Mumbai’s self-redevelopment landscape, the Bombay High Court has ruled that municipal tax clearance cannot be imposed as a precondition for executing a deemed conveyance order. However, it upheld the requirement of a structural stability certificate, emphasizing public safety before redevelopment begins.
The ruling, delivered on September 10, 2025, in Prabhu Niwas Co-operative Housing Society Ltd. vs. State of Maharashtra & Ors. (Writ Petition No. 8921 of 2025), offers clarity on the limits of administrative discretion in deemed conveyance orders under the Maharashtra Ownership Flats Act (MOFA) and its interplay with RERA.
Case Background
The 42-year-old Prabhu Niwas Co-operative Housing Society in Andheri, Mumbai, had secured deemed conveyance in 2022 after the developer failed to execute it for 15 years post-occupation. But in 2024, the District Deputy Registrar added two contentious conditions — requiring the society to first clear property tax dues and furnish a structural safety certificate before redevelopment.
The society, pursuing self-redevelopment under the Maharashtra Self-Redevelopment Guidelines (2019), argued that MOFA Section 11 doesn’t authorize such conditions and that these restrictions delayed their ₹10 crore project. The society also claimed violation of Article 14, pointing out that developer-led projects weren’t subjected to similar hurdles.
Court’s Findings and Reasoning
The Court partly allowed the petition — striking down the tax clearance condition but retaining the stability certificate requirement.
Justice [Name withheld] observed that MOFA mandates conveyance upon society formation once the promoter defaults, and no fiscal condition can be added. Referring to Laxmi Co-operative Housing Society vs. State of Maharashtra (2023), the Bench held that tax disputes are separate from title transfer and cannot delay conveyance.
However, the Court upheld the structural safety certificate as a “reasonable and necessary” safeguard, aligning with RERA Section 11(4)(e), which places responsibility on housing societies to ensure the safety and viability of redevelopment. The judgment cited recent building collapses in Mumbai, stressing that aging structures must undergo structural audits before being redeveloped.
Orders Issued:
- Tax clearance condition quashed, conveyance deed to be executed within 30 days.
- Structural stability certificate mandatory within 60 days, supervised by MahaRERA.
- Municipal corporation directed to resolve tax appeal within 90 days.
- No costs imposed, recognizing cooperative limitations and wider policy impact.
Broader Significance
This verdict is expected to impact over 3,000 housing societies in Mumbai navigating post-conveyance redevelopment, marking a crucial step toward harmonizing MOFA’s ownership guarantees with RERA’s safety mandates.
By separating title transfer rights from compliance obligations, the Court has ensured that fiscal disputes don’t paralyze urban renewal — while still reinforcing safety as non-negotiable. The judgment thus strengthens the legal foundation for self-redevelopment and cooperative housing governance in Maharashtra.
