Deemed Conveyance – Agreement Vs Rules 9 and 11 of MOFA Rules 1964
The petitioner – Developer – has challenged the legality of the order dated 21.3.2017 granting certificate of deemed conveyance in favour of the respondent No.3 – Cooperative Housing Society. The certificate was for the land 5219.90 sq.meters with undivided share and interest in the common areas and common facilities to the extent of 17288.80 sq.meters out of total area of 29897.20 sq.meters of the larger layout.
This was objected on the ground that the development of the project is still ongoing and therefore, issuance of deemed conveyance for the entire land including undivided share in common areas and facilities in favour of one single society respondent no.3, without considering the composite nature of the development and the incomplete construction is not legal and would prejudice the lawful rights of the developer. It was said that Clauses 25 and 28 of the agreement provided that conveyance can be executed only after completion of the entire development scheme.
HELD that the agreements of sale under Section 4 of MOFA were executed in 1995 and the respondent no.3 society was registered in 2006. Rule 9 of the MOFA Rules, 1964, leaves no room for ambiguity and categorically prescribes the time frame within a promoter is required to convey title to the society. The Rule provides that unless a specific period is mutually agreed upon between the parties, the promoter shall execute the conveyance deed within four months from the date of registration of the society. Accepting the petitioner’s contentions would amount to rendering the statutory mandate under MOFA nugatory and placing the rights of the flat purchasers at the unregulated discretion of the promoter. Such an interpretation cannot be sustained in law. It would frustrate the very purpose for which MOFA was enacted
Rule 9 read with Rule 11 costs a positive obligation on the promoter to execute the conveyance of title and it is not merely procedural in nature but substantive safeguard against indefinite and deliberate delay on the part of the promoter. The four-month period is a codified timeline intended to operationalize the legislative objective of ensuring that flat purchasers are not left in a state of uncertainty regarding title to the land and building in which their flats are situated. This obligation cannot be evaded on the basis of private contractual stipulations that seek to indefinitely defer the promoter’s duty, nor can it be defeated by reference to alleged defaults by individual purchasers. MOFA being a social welfare legislation intended to protect the interests of flat purchasers.
The term “period” in Rule 9 cannot be interpreted to mean an indeterminate, future event-based timeline such as “completion of the entire development scheme”.
Clause 28 of the Agreement provides for conveyance in favour of a federation of societies and not in favour of individual societies.
Judgment dated 26.3.2025 of the High Court of Bombay in Writ Petition No.6418 of 2017 (AS) of Lok Housing & Construction Ltd Vs. State of Maharashtra and others
