Writ Petition No.2410 of 2012

24th January, 2014

Petitioner Counsel: Mr. S.U. KAMDAR, Mr. GIRISH DAVE, Ms. MONIKA NAIK, Mr. M.V. GUPTA, Mr. HUSSAIN SOMJI
Respondent Counsel: Ms. GEETA SHASTRI, Mr. CHIRAG BALSARA, Mr. D.F. SHARMA, UMA SHARMA, Mr. MAYUR AGARWAL

Cases Cited:
M/s. Shree Siddharth Construction Builders and Developers Vs. Shree Saraswati Apartment Co-operative Housing Society Ltd., W.P./1439/2012, Dt.17/10/2013 [Para 7]
Mazda Construction Company & Ors. Vs. Sultanabad Darshan CHS Ltd. & Ors., 2013(2) ALL MR 278 [Para 9,19]

JUDGMENT

V. M. KANADE, J. :- Rule. Rule is made returnable forthwith by consent of parties. Heard the learned Senior Counsel appearing on behalf of the Petitioner, Shri Balsara, the learned counsel appearing on behalf of Respondent Nos.4 to 6 and the learned AGP appearing on behalf of Respondent Nos.1 and 7.

2. By this petition, which is filed under Article 226 of the Constitution of India, the Petitioner is challenging the impugned order passed by Respondent No.1 - District Deputy Registrar, Co-operative Societies, Mumbai City (3), who is the Competent Authority, appointed under section 5 of the Maharashtra Ownership Flats (Regulations of Promotion of Construction, Sale, Management and Transfer) Act, 1963 (for the sake of convenience, hereinafter referred to as "MOFA Act"). The Petitioner is aggrieved by the conditions imposed by Respondent No.1, in which it was observed that only after the said conditions are complied with, the deemed conveyance will be executed as per the provisions of Section 11 of the MOFA Act.

3. Brief facts, which are relevant for the purpose of deciding this petition, are as under:

Respondent No.3 was the owner of larger plot of land bearing CTS No. 57, admeasuring 22,407.20 sq.mtrs. He executed an agreement for sale dated 12th March, 1988 along with an irrevocable power of attorney dated 19th April, 1991 in favour of Respondent No.2. In view of the said agreement, executed by Respondent No.3 in favour of Respondent No.2, the developer constructed various buildings on the larger plot of land.

The said larger plot of land later on, has been divided into five parts being Plot No. A, Plot No. B, Plot No. C, Plot No. D and Plot No. E and new CTS numbers were given to the said plots. The Petitioner is a society, which is concerned with the sub-divided plots being CTS No. 57E. Respondent No.2-Developer constructed two buildings viz. Sushil Samir and row houses, and sold the flats therein to various persons who are the members of the Petitioner Society. Under the agreement for sale, Respondent No.2 had given an assurance that on completion of the project, he would convey the plot in favour of the flat purchasers of the Petitioner Society. The grievance of the Petitioner is that despite several representations being made by them after completion of the construction of the buildings, Respondent No.2 did not convey the property to the ultimate flat purchasers.

4. The MOFA Act was amended and the Competent Authority was appointed under section 5A of the MOFA Act, authorizing him to issue a certification of deemed conveyance after holding an inquiry under Section 11 of the MOFA Act.

5. Since Respondent Nos.2 and 3 did not convey the property as per the terms and conditions of the agreement for sale, the society approached the Competent Authority appointed under Section 5 A of the MOFA Act and filed an application for deemed conveyance. The Competent Authority made an inquiry and passed the impugned order dated 4th June, 2012. By the said order, the Competent Authority was pleased to certify that the Petitioner was entitled to unilateral conveyance executed as deemed conveyance in its favour and to have it registered and came to the conclusion that it was a fit case where the Petitioner was entitled to get the conveyance. The Deputy Registrar in the said order observed that the said conveyance would be granted subject to the Petitioner fulfiling the five conditions mentioned in paragraph 2 of the said order and in para 3, he further directed that the Applicant Society is authorized to prepare a Conveyance Deed after the conditions, ascertained in paragraph Nos. 2 (i) to (v), are completed.

6. Being aggrieved by the said conditions, which were imposed by the Competent Authority, the Petitioner is approaching this Hon'ble Court by invoking its writ jurisdiction under Article 226 of the Constitution of India.

7. Shri Kamdar, the learned Senior Counsel appearing on behalf of the Petitioner submits that the condition Nos. 2(i), (ii) and (iii) could not have been imposed by the Competent Authority. He submitted that the Competent Authority was not authorized in law to impose the condition Nos. 2(i), (ii) and (iii). Secondly, he submitted that the said conditions were impossible to comply and, therefore, the Competent Authority could not have imposed the said conditions. Thirdly, he submitted that the jurisdiction vested in the Competent Authority was restricted to the functions which he was required to perform under Section 11 (3) and (4). So far as the recovery of stamp duty and other aspects are concerned viz. the condition of ascertaining the area which is to be conveyed, the Competent Authority had stated that the said area should be ascertained subsequently. He submitted that it was the duty of the Competent Authority to have considered the said area which was to be conveyed by making an inquiry as contemplated under Section 11 (4) of the said Act. He, therefore, submitted that a direction may be given to the Competent Authority to make an inquiry to that effect. Reliance was placed on the judgment of the Division Bench of this Court in M/s. Shree Siddharth Construction Builders and Developers vs. Shree Saraswati Apartment Co-operative Housing Society Limited, delivered in Writ Petition No.1439 of 2012 by the Division Bench dated 17th October, 2013.

8. On the other hand, the learned counsel appearing on behalf of Respondent Nos. 4 to 6 submitted that so far as condition Nos. 2(iv) and 2(v) are concerned, the said conditions were rightly imposed by the Competent Authority and before issuing a deemed conveyance certificate, it was the duty of the Competent Authority to determine the area which was to be conveyed to the Petitioner society. He submitted that in this case, he was appearing on behalf of the other Societies viz. Rihan, Krishna and Siddhant, which was the other societies in the layout. He submitted that these societies were also entitled to get the conveyance and the dispute is also same in respect of the area which was to be conveyed in favour of each society. The said dispute had arisen on account of the FSI which was utilized and TDR which was used while constructing these buildings. He submitted that, therefore, the Competent Authority was justified in imposing these conditions. He submitted that in the alternative, a direction may be given to the Competent Authority to calculate the said area after obtaining the relevant information from the Petitioner and Respondent Nos.4,5 and 6.

9. On the other hand, the learned AGP for the State submitted that as per the letter written by the District Deputy Registrar dated 22.1.2014 that the said Competent Authority had given a written information as under:-

"1. This Office will reconsider the proposal for deemed conveyance, if the Applicant Society gives an Indemnity Bond/Affidavit that if need arises the co-op. Society will pay the required stamp duty on Sale Agreement of Land between Land owner and Developer.

2. This Office will not wait for further instructions in continuation of circular dated 25.2.2011 from State Government regarding conveyance if the Society gives Architect Certificate regarding the area claimed by it & regarding demarcation of the Entire layout plot and there is no dispute between the other co-op. societies in the layout.

3. This Office will not press for involvement of Land Owner as Confirming Party in the Individual Agreement of Flat Owners."

It was, therefore, submitted that so far as the condition Nos.2(ii) and 2(iii) are concerned, the said conditions may be deleted and that the Competent Authority had agreed not to insist upon the said conditions. She submitted that so far as condition No. 2(i) is concerned, if the Petitioner undertakes to give an Indemnity Bond that if need arises, the co-operative Society will pay the required stamp duty on Sale agreement of land between Land Owner and Developer, in that case, the Competent Authority would reconsider the proposal for deemed conveyance. She submitted that the Competent Authority was justified in imposing the other conditions in order to safeguard the interest of the revenue. It was submitted that the Deputy Registrar-Competent Authority, therefore, was authorized to impose the said conditions. Reliance was place on the judgment of the Learned Single Judge of this Court in the case of Mazda Construction Company & Ors. Vs. Sultanabad Darshan CHS Ltd. & Ors. [2013(2) ALL MR 278]. It was submitted that in the said case also, the Court had considered the provisions of Section 10 and 11 and in paragraph 20 and 27, had laid down that the two sections had to be read together harmoniously with the preceding sections. She submitted that the Learned Single Judge in paragraph 20 had observed that the Competent Authority had to take into consideration the earlier provisions and contents of the other relevant documents. She also invited our attention to the observations made in paragraph 27 of the said judgment.

10. After having heard all the counsel at length and before dealing with the relevant rival submissions, it would be necessary to quickly have a look at the relevant provisions viz. Section 10 and 11. Section 10 of the said Act imposes an obligation on the part of the Promoter/ Developer to convey the property to the flat purchasers and/or to the society of the flat purchasers. Section 11 of the said Act gives a power and authority to the Competent Authority which is constituted under section 5A of the MOFA Act to make an inquiry and find out whether the promoter who is obliged to convey the property to the society and if he has failed in his duty to fulfill that obligation and if it so, comes to the conclusion, then he has to make an inquiry after the applicant produces the relevant documentary evidence and records and, thereafter, issue a certificate of deemed conveyance in favour of such an applicant. Section 11 reads as under:-

"11. Promoter to Convey title, etc., and execute documents according to agreement.- [Renumbered by Mah. 4 of 2008 (w.e.f 25-02-2008)] (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 [These words were inserted by Mah. 15 of 1971, Sch.] [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.

[Sub-sections (2) to (5) inserted by Mah. 4 of 2008 (w.e.f. 25-02-2008)] (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 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 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 authencity 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, the certificate issued by the Competent Authority along with 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 applicant a reasonable opportunity of being heard, may, on being satisfied that it was a fit case for unilateral conveyance, register that instrument as 'deemed conveyance'."

11. Perusal of the said section, reveals that the said section can be divided in three parts; Section 11, sub-sections (1) and (2) lays down the duty which is to be performed by the promoter to file with the Competent Authority within the prescribed period, a copy of the conveyance executed by him under sub-section (1). The second part is divided in sub-sections (3) and (4) and it is provided that if the promoter fails to execute the conveyance in favour of the co-operative society, then in such cases, the society is permitted to make an application seeking deemed conveyance. Sub-section (3) lays down what are the documents, which are to be accompanied along with the application. Sub-section (4) then deals with the enquiry which is to be conducted by the Competent Authority. Sub-section (4), therefore, deals with the limit, within which, the Authority has to exercise its jurisdiction before issuing a certificate to the Sub-Registrar or any other appropriate Registration Officer under the Registration Act, 1908. The third part deals with the duty which is imposed on the Sub-Registrar, after such a certificate is issued by the Competent Authority, is tendered to the said officer. The third part deals with the enquiry which is to be conducted by the Sub-Registrar before registration of the instrument as deemed conveyance.

12. The said section, therefore, clearly reveals the two separate areas in which enquiry has to be conducted; one by the Competent Authority and secondly, by the Sub-Registrar.

13. Perusal of the facts of the present case, clearly reveal that the Competent Authority appointed under section 5A has transgressed its jurisdiction and has imposed conditions 2(i), 2(ii) and 2(iii), which do not fall within his jurisdiction and, as such, therefore, was not authorized to deal with the said issues which are found in Condition Nos. 2 (i) to 2 (v). In this context, therefore, it would be necessary to reproduce the conditions which are imposed by the Competent Authority under Clause 2(i) to 2(v), reads as under:

"2(i) The agreement for sale dated 12.3.1988 between the owners M/s. Music India Ltd. and M/s. Gokul Enterprises is not properly stamped. As per the modification done in the Bombay Stamp Act, 1958, w.e.f. 10.12.1985, the agreement for sale is deemed to be conveyance and the applicable stamp duty has to be paid. In case, stamp duty is not paid, it will not be admitted as evidence in any court of law, including before the competent Authority under section 34 of Bombay Stamp Act, 1958. Since agreement is to purchase entire property of 22407.20 Sq.Meters and not the part of the property which need to be conveyed to the society as the society has relied upon the agreement dated 12.3.1988 for getting deemed conveyance. The society should submit the duly stamped agreement for sale as required under Bombay Stamp Act, 1958.

(ii) The property is a layout property and as per Govt circular dated 25.2.2011, the detailed guidelines are awaited before the same is decided by the Authority. The actual conveyance deed can be executed only after receiving the proper guidelines in the matter.

(iii) The agreement for sale executed with individual flat owners are not having the land owners as the confirming party as per the Model Agreement prescribed in MOFA Rules in Form V and also as per the judgment of High Court in the matter of Ramaniklal Tulsidas Kotak Vs. Vasha Builders. The proper reasons and the evidence has to be given to establish the title flow and to grant the deemed conveyance.

(iv) The plan submitted is for building No.5 and the existing Building (5 row houses, Building No.1 Wing C and B = 112 flats, Bld No.4 (A wing and Part B wing) 154 flats has consumed 15054.32 Sq. Meters and 1585.82 Sq. Meters is consumed for building No.5. So proportionate working is difficult. Proper architect certificate for entitlement of the area need to be submitted.

(v) There are other societies in the layout known as Rihan, Krishna & Siddhant (Other societies in the layout) want to get the conveyance together and requested to give joint conveyance. The are should be ascertained by taking joint measurement of all the societies.

14. Perusal of the said conditions, which are imposed, clearly reveal that Respondent No.1-Competent Authority did not have jurisdiction to impose the conditions which are mentioned in Condition Nos. 2(i) to (v) since the area, at the most, could have been considered by the Sub-Registrar.

15. We do not have any hesitation to hold that the Competent Authority, therefore, has committed an error of law which is apparent on the face of record in imposing the condition Nos. 2(i), 2(ii) and 2(iii) in the impugned order. The said conditions, therefore, are quashed and set aside.

16. So far as the condition Nos.2(iv) and 2(v) are concerned, in our view, the Competent Authority ought to have decided the said issue before issuing a certificate of deemed conveyance, and instead of that, the deemed conveyance certificate is issued. Subject to condition Nos. 2(iv) and 2(v) being imposed, he ought to have decided the area which was to be conveyed in favour of the Petitioner Society and other societies rather than saying that after the conditions imposed viz. 2(i) to 2(v) are complied with, only thereafter, the said certificate would become effective.

17. We, therefore, of the view that the Competent Authority ought to have collected the relevant documents from the Petitioner and Respondent Nos.4,5 and 6 and then arrived at the conclusion regarding the area which was to be conveyed at least in favour of the Petitioner Society since no application has been filed by Respondent Nos.4,5 and 6 seeking deemed conveyance. We, therefore, direct the Competent Authority to make a further inquiry after calling upon the Petitioner and other Respondent Nos.4, 5 and 6 Societies to submit the documents regarding the area consumed by them and, thereafter, decide the question of area, and direction may be given by the Competent Authority to the Petitioner and to the Respondents to submit a proper Architect's certificate for the entitlement of the area and other relevant documents. The said conditions 2(iv) and 2(v) are set aside and we direct the Competent Authority to determine the area which is to be conveyed in favour of the Petitioner Society as per the directions given hereinabove.

18. So far as paragraph 3 of the impugned order is concerned, the words "after the compliances of conditions mentioned hereinabove" are set aside. Similarly in paragraph 5, instead of directing the Sub-Registrar to take action under Bombay Stamp Act, 1958 and Transfer of Property Act, 1882, a direction is given to the Sub-Registrar to take action in accordance with the provisions of sub-section (5) of Section 11 of the MOFA Act.

19. The submissions made by the learned AGP appearing on behalf of the State cannot be accepted for the reasons mentioned hereinabove. So far as the judgment on which the reliance was placed by the learned AGP for the State viz. Mazda Construction Company & Ors. (supra) is concerned, there cannot be any dispute regarding the ratio of the said judgment. However, in our view, the ratio of the said judgment will not apply to the facts of the present case since the issue involved in the said case is different. The Competent Authority had directed that certain area, which was disputed, should also be conveyed in favour of the said society without taking into consideration the objections which were raised and in that context, the Learned Single Judge had made the observations which are found in paragraphs 20 and 27 of the said judgment. The writ petition, therefore, is partly allowed in the aforesaid terms. The Competent Authority is directed to take a decision in respect of the area which is to be conveyed in favour of the society, after taking into consideration the judgment of the Division Bench of this Court in Writ Petition No.1439 of 2012 and other judgments of this Court. He may complete the said exercise within twelve weeks after hearing both the parties. Writ petition is, accordingly, disposed of.

Petition partly allowed.