Maharashtra Ownership Flats Act | Writ Court Shouldn't Interfere With Deemed Conveyance Order Unless Manifestly Illegal : Supreme Court

In a significant judgment related to the Maharashtra Ownership Flats Act, 1963 (“MOFA”), the Supreme Court on Monday (April 21) held that the competent authority under MOFA has the power to grant an order of deemed conveyance. It further emphasized that High Courts should not interfere with such orders unless they are found to be illegal.

The bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan heard an appeal challenging the Bombay High Court's refusal to intervene in an order passed by the competent authority under Section 11(4) of the Maharashtra Ownership Flats Act (MOFA). The appellant(developer) was aggrieved by the decision, which upheld the grant of deemed conveyance to a co-operative housing society formed by flat owners who had purchased units from the developer but had not received a formal conveyance in the society's favor.

Upholding the High Court's decision, the judgment penned by Justice Abhay S. Oka underscored that the Maharashtra Ownership Flats Act (MOFA) is a welfare legislation designed to protect the interests of flat purchasers and address malpractices by developers. The Act empowers the competent authority to issue a deemed conveyance when a developer fails to execute the conveyance in favor of the flat owners. Consequently, courts should exercise restraint and refrain from interfering with such orders unless they are found to be unlawful.

“The MOFA is a beneficial legislation enacted to protect home buyers, considering the ever-increasing housing shortage in urban areas. The Legislature has noted the increasing malpractices by the developers. The provisions of Section 11 are for the benefit of the flat purchasers. In writ jurisdiction, the Court should not interfere with the order granting deemed conveyance under Section 11 (4), unless the order is manifestly illegal. The writ court should generally be slow in interfering with such orders. The reason is that, notwithstanding the order under Section 11(4), the remedy of aggrieved parties to file a civil suit remains open. In this case, substantial justice has been done by protecting the appellant's rights as a perpetual lessee with a right to develop the Arun plot. Therefore, interference in writ jurisdiction was not warranted.”, the court observed.

Other Relevant Observation

"i. It is no doubt true that quasi-judicial powers have been conferred on the competent authority while dealing with applications under Section 11(3) of the MOFA. However, proceedings before the competent authority under Section 11(3) are of a summary nature, as can be seen from the MOFA Rules. Therefore, the competent authority, while passing the final order, must record reasons;

ii. The competent authority, while following the summary procedure, cannot conclusively and finally decide the question of title. Therefore, notwithstanding the order under sub-section (4) of Section 11, the aggrieved parties can always maintain a civil suit for establishing their rights;

iii. The provisions of Section 11 are for the benefit of the flat purchasers. In writ jurisdiction, the Court should not interfere with the order granting deemed conveyance unless the same is manifestly illegal. The writ court should generally be slow in interfering with such orders. The reason is that, notwithstanding the order under Section 11(4), the remedy of aggrieved parties to file a civil suit remains open; and

iv. The registering officer has no power to sit in appeal over the order of the competent authority while exercising the power under Section 11(5). He can refuse registration only on the grounds indicated in paragraph 23 above and not beyond. Thus, the scope of the powers conferred on the registering officer is limited."

In terms of the aforesaid, the Court dismissed the appeal as substantial justice was served upon passing of the order granting deemed conveyance in the co-operative society's favor.

Case Title: ARUNKUMAR H SHAH HUF versus AVON ARCADE PREMISES CO-OPERATIVE SOCIETY LIMITED & ORS.

Citation : 2025 LiveLaw (SC) 447

Click here to read/download the judgment

Appearances:

For Appellant(s) : Mr. Kush Chaturvedi, AOR Mr. Suraj Iyer, Adv. Ms. Gauri Joshi, Adv. Mr. Syed Faraz Alam, Adv. Mr. Atharva Gaur, Adv. Mr. Aayushman Aggarwal, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Mr. Victor Das, Adv. Mr. Shashank Shah, Adv. Mr. Kaustubh Singh, Adv. Mr. Rongon Choudhary, Adv. Mr. Siddhant Sahay, Adv. Mr. Ashwini Kumar, Adv. Mr. E. C. Agrawala, AOR

For Respondent(s) : Mr. Gaurav Goel, AOR Mr. Yatin R Shah, Adv. Mrs. Aparna Rohatgi Jain, Adv. M/S. Karanjawala & Co., AOR Mr. Sanyat Lodha, AOR Ms. Jasmine Damkewala, AOR Mr. Mac Bodhanwalla, Adv. Mr. Sheroy Bodhanwalla, Adv. Ms. Vaishali Sharma, Adv. Mr. Divyam Khera, Adv. Mr. V. N. Raghupathy, AOR Mr. Anand Dilip Landge, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Sanjay Kharde, Sr. Adv. Mr. Satyajeet Kharde, Adv. Mr. Sunny Jadhav, Adv. Mr. Kailas Bajirao Autade, AOR