Summary
A flat purchasers' society obtained a certificate of deemed conveyance of an entire plot under Section 11 of the Maharashtra Ownership Flats Act, 1963, subject to executing a permanent lease of one portion (the 'Arun plot') to the appellant HUF, which claimed that portion under a 1987 deed of dissolution. Dismissing the appeal, the Court held that the competent authority's proceedings under Section 11(3) are summary and quasi-judicial, that it must record reasons but cannot finally decide title (a civil suit remains open), that writ courts should interfere only if the order is manifestly illegal, and that the registering officer under Section 11(5) cannot sit in appeal over the certificate; the dissolution deed itself contemplated conveyance of the whole plot to the society with a perpetual lease back to the appellant.
Issues
- What is the scope of the powers of the competent authority under Section 11(3) and (4) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, and whether it can conclusively decide disputed questions of title.
- What is the scope of the registering officer's power under Section 11(5) of the MOFA when a certificate of deemed conveyance is presented for registration.
- When should a writ court interfere with an order of the competent authority granting deemed conveyance.
- Whether the deemed conveyance of the entire plot to the society, subject to a permanent lease of the Arun plot in favour of the appellant, was justified on the deed of dissolution, the partnership deed and the flat purchase agreements.
Provisions considered
- Section 11(1), (3), (4) and (5), Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963Section 11 was quoted and construed. Sub-section (1) obliges the promoter to convey title to the flat purchasers' organisation; sub-section (3) gives the society a speedy remedy to seek a certificate of entitlement to unilateral deemed conveyance; under sub-section (4) the competent authority, after enquiry and hearing the promoter, issues the certificate to the registering officer; under sub-section (5) that officer summons the promoter and, if satisfied, registers the instrument. Proceedings under sub-section (3) are summary and cannot finally decide title; the registering officer's role under sub-section (5) is limited, the two sub-sections being read harmoniously. (¶¶ 17, 18, 20, 22, 23, 37)
- Sections 2(c), 4(1), 5A and 10, Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963The developer (10th respondent) is a 'promoter' under Section 2(c); Section 4(1) requires a registered agreement for sale in the prescribed form; Section 10 obliges the promoter to form a society or company of flat purchasers; the competent authority under Section 5A is the District Deputy Registrar who decides applications under Section 11(3). (¶¶ 7, 16, 18)
- Rules 11(2) and 13(3), (4) and (5), Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Rules, 1964The rules prescribe notice to the promoter, a written statement, production of documents, a hearing with an absolute prohibition on cross-examination, compliance with natural justice and an outer limit of six months for the order. Because the procedure is summary and cross-examination is barred, the competent authority cannot conclusively decide title, and it must record reasons when deciding an application. (¶¶ 19, 20)
- Registration of certificate of deemed conveyance under Section 11(5) MOFA, Registration Act, 1908The registering officer under the 1908 Act may refuse registration only where a statutory prior permission or consent for the conveyance is not produced, where a court's prohibitory order restrains the promoter from conveying, or where stamp duty and other procedural requirements of the 1908 Act are not met; he cannot reopen the competent authority's findings or examine the correctness of its order. (¶¶ 22, 23)
Held
- Section 11(3) of the MOFA was enacted to give flat purchasers a speedy remedy to enforce the promoter's obligation under Section 11(1) to convey title; the MOFA Rules lay down a summary procedure with notice, written statement, documents, hearing, no cross-examination and a six-month outer limit. Considering the nature of the power, the competent authority must record reasons when passing orders on an application under Section 11(3). (¶¶ 18, 19, 37)
- Although quasi-judicial powers are conferred on the competent authority, the proceedings under Section 11(3) are of a summary nature and cross-examination is absolutely prohibited; the authority therefore cannot conclusively and finally decide questions of title, and notwithstanding an order under Section 11(4) the aggrieved parties can always file a civil suit to establish their rights. (¶¶ 20, 37)
- The registering officer acting under Section 11(5) is neither an appellate nor a revisional authority and cannot reopen or set aside the competent authority's findings or go into the correctness of its order. Sub-section (5) exists to give the promoter an opportunity because the certificate is unilateral; the officer may refuse registration only where a statutory prior permission or consent is not produced, where a prohibitory order of a competent court is in force, or where stamp duty and other procedural requirements of the Registration Act, 1908 are not complied with. This is the only harmonious construction of sub-sections (4) and (5). (¶¶ 22, 23, 37)
- The deed of dissolution dated 13/02/1987, signed by Arun as Karta of the appellant HUF, allotted the Lalbhai plot to Lalbhai for development and building No. 3 with its surrounding land (the Arun plot) to the appellant, and by clause 8(h) provided that when Lalbhai conveyed the property described in the schedule (the larger, unsubdivided plot) to a co-operative society, Lalbhai or the society would execute a lease in perpetuity of the Arun plot in favour of Arun at Re. 1 per year; the partnership deed of the developer firm and the flat purchase agreements likewise recorded that the Arun plot belonged to the appellant and that the conveyance would be subject to the lease dated 16/07/1991 in its favour. The clause is binding on the appellant. (¶¶ 24, 25, 26, 27, 28, 29, 30, 31)
- The competent authority's order granting deemed conveyance of the entire larger plot to the society subject to its executing a permanent lease of the 903.06 sq. m. Arun plot in favour of the appellant reflected the fact that the plot had never been subdivided and that the society, on conveyance, steps into the shoes of the appellant's lessor; the order was not vague, since it referred to clause 8(h) and the 1991 lease, and the lease to be executed must be on the terms of the deed of dissolution (including the appellant's specific FSI and 32% share of future FSI) and of the lease deed dated 16/07/1991. No fault could be found with the order. (¶¶ 32, 33, 34, 36)
- The MOFA is a beneficial legislation protecting home buyers against malpractices of developers, and Section 11 is for the benefit of flat purchasers. A writ court should not interfere with an order granting deemed conveyance under Section 11(4) unless it is manifestly illegal, and should generally be slow to do so, because the remedy of a civil suit remains open; here substantial justice was done by protecting the appellant's rights as perpetual lessee with the right to develop the Arun plot. (¶¶ 35, 37)
Result
Appeal dismissed; registration of the certificate of deemed conveyance to be subject to the first respondent society executing a permanent lease of the Arun plot in favour of the appellant or its nominees on the terms of the deed of dissolution dated 13/02/1987 and the lease deed dated 16/07/1991; even if such lease is not executed, the appellant's rights as perpetual lessee under those deeds remain unaffected and cannot be disputed by the society; no order as to costs.