Bombay High Court Upholds Housing Societies Right to Deemed Conveyance Despite Builder Delays

May 11, 2025

In a landmark judgment reinforcing the rights of homebuyers, the Bombay High Court has ruled that developers cannot use their own delays in project completion as a reason to deny housing societies their statutory right to deemed conveyance.

Background of the Case

The case involved an association of three cooperative housing societies—Rameshwar CHS (established in 2004), Mansarovar CHS (2005), and Girija CHS (2011)—formed under the Maharashtra Ownership Flats Act (MOFA), 1963. These societies are part of a larger development project initiated by Abhinav Real Estate Pvt Ltd (now Neelkanth Realtors Pvt Ltd) in 1995, covering 52,609 square meters in Majiwada, Thane. The project, reaffirmed in 2002, resulted in eight residential buildings comprising 740 flats and 29 commercial units.

Despite the completion and occupation of these buildings, the developer failed to execute the conveyance deeds transferring ownership of the land and structures to the respective housing societies. In 2024, the three societies united to form an association and applied for deemed conveyance under MOFA.

Court's Observations and Ruling

Justice Amit Borkar, presiding over a single-judge bench, addressed the petition challenging the competent authority's rejection of the deemed conveyance application. The authority had cited the developer's plans for further development using additional Floor Space Index (FSI) and Transferable Development Rights (TDR) as reasons for the denial.

Justice Borkar dismissed these arguments, stating, The right of flat purchasers to receive conveyance crystallises once the society is formed. This right does not depend on any vague promises or future intentions of the promoter to construct additional buildings or complete an entire layout.

He further emphasized that once a reasonable time has passed, the promoter is legally bound to convey the property. In this case, the promoter has neither completed the remaining development nor provided any concrete plan to do so. They cannot be permitted to use their own delay as a shield to obstruct the rights of the society.

Consequently, the court directed the District Deputy Registrar, Cooperative Societies, Thane, to issue a deemed conveyance certificate to the association, effectively granting ownership rights to the housing societies.

Implications of the Judgment

This ruling sets a significant precedent, affirming that:

Developers cannot indefinitely postpone the transfer of property ownership to housing societies by citing ongoing or future development plans.
The statutory rights of flat purchasers and housing societies under MOFA take precedence over the developer's delays or intentions.
Competent authorities are obligated to grant deemed conveyance when societies meet the necessary criteria, regardless of the developer's cooperation.

Legal experts view this judgment as a reinforcement of homebuyers' rights and a deterrent against developers' tactics to delay property transfers. It underscores the importance of timely conveyance and the legal mechanisms available to housing societies to assert their rights.

The Bombay High Court's decision marks a pivotal moment in the ongoing efforts to protect homebuyers and ensure their legal entitlements are upheld. By holding developers accountable and emphasizing the enforceability of statutory rights, the court has provided a clear directive that delays on the part of builders cannot impede the rightful claims of housing societies to property ownership.