The Bombay High Court addresses the pivotal issue of whether an illegal or unauthorized building structure impairs a cooperative housing society's statutory right to obtain a deemed conveyance of land and building under Section 11 of the Maharashtra Ownership of Flats (Regulation of Promotion of Construction, Sale, Management, and Transfer) Act, 1963 (MOFA). The court ruled in favor of the petitioner, emphasizing the promoter's obligation to transfer ownership to the society and held that the lack of an occupation certificate or other compliance failures by the promoter cannot deny the society’s right to deemed conveyance.

1. Petition Overview

• Parties Involved: ALJ Residency Co-operative Housing Society (Petitioner) vs. State of Maharashtra, District Registrar, and others (Respondents).
• Cause of Action: Challenging the rejection of the society's application for deemed conveyance under Section 11 of MOFA by the Competent Authority.

2. Background

• Land and building located at Pali Mala Road, Mumbai, were developed by Respondent 22 (Developer) through an agreement with legal heirs of the original owner.
• Flat purchasers occupied the building, but essential legal compliance, including obtaining an occupation certificate, was incomplete.
• Application for deemed conveyance was rejected by the Competent Authority on grounds of incomplete documentation and illegal construction.

3. Legal Contentions

• Petitioner’s Argument:

  • The promoter’s failure to obtain occupation certificates cannot bar the society's right to conveyance.
  • Deemed conveyance is essential for redevelopment and regularization.
  • The statutory obligation under Section 11(3) overrides defects in documentation.

• Respondent’s Argument:

  • The structure is unauthorized; deemed conveyance cannot legalize illegality.
  • Application lacked required agreements and plans.

4. Court's Analysis

• On Documentation:
  • The Competent Authority erred in rejecting the application after issuing initial notices under Rule 13 of the 1964 Rules, implying completeness of the application.
• On Occupation Certificate:
  • Occupation certificates are not mandatory for granting deemed conveyance under MOFA.
  • Promoters cannot use their own non-compliance to deprive societies of their statutory rights.
• On Illegality of Construction:
  • Deemed conveyance does not regularize unauthorized construction; it merely transfers title from the promoter to the society.

5. Final Order

• The rejection by the Competent Authority was quashed.
• The Competent Authority was directed to issue a deemed conveyance certificate upon the society submitting a self-declaration as per the Government Resolution dated June 22, 2018.

Acts and Sections Discussed:

1. Maharashtra Ownership of Flats Act (MOFA), 1963:
   • Section 11(3): Obligation of promoters to execute conveyance to societies.
   • Section 4: Requirements for agreements between promoters and purchasers.
2. Rules of 1964:
   • Rule 13: Procedure for scrutiny and acceptance of deemed conveyance applications.
3. Transfer of Property Act, 1882 (via Section 16 of MOFA): Supplementary applicability.

Ratio Decidendi:

The court clarified that the absence of an occupation certificate or the presence of unauthorized construction does not bar the right of a housing society to seek deemed conveyance under Section 11 of MOFA. The statutory obligations of the promoter override procedural defects, ensuring that flat purchasers are not penalized for the promoter's non-compliance.

Subjects:

Property Law, Cooperative Societies, Real Estate Regulation
Deemed Conveyance, MOFA, Promoter Obligations, Housing Societies, Unauthorized Construction, Occupation Certificate