Bombay HC Upholds Deemed Conveyance To Vile Parle Housing Society

The Bombay High Court has refused to interfere with a deemed conveyance granted in favour of a housing society in Vile Parle, Mumbai. The court held that a developer cannot indefinitely delay transferring land to flat purchasers merely to exploit additional Floor Space Index (FSI) made available under a changed development regime.

On July 17, Justice Sandeep Marne dismissed a petition filed by Ariisto Realtors Pvt Ltd challenging a 2025 order of the Competent Authority granting unilateral deemed conveyance of the land and building to Ariisto Cloud Cooperative Housing Society. The society, representing flat owners in the Ariisto Cloud building, was registered in June 2016 after the developer completed a nine-storey building comprising 12 residential flats, a commercial unit and two shops.

The society had sought deemed conveyance after the developer failed to transfer the land and building in its favour. The developer had argued that the Competent Authority wrongly entertained a second application for deemed conveyance after rejecting the first one, amounting to an impermissible review of its earlier order. It also claimed a contractual right to utilise additional FSI available under the Development Control and Promotion Regulations (DCPR), 2034.

Rejecting the contention, the court held that the authority had not exercised any power of review because the earlier order had expressly granted the society liberty to file a fresh application after completion of construction. Since the building was complete, the society was entitled to invoke that liberty.

The court emphasised the object of the Maharashtra Ownership Flats Act (MOFA), stating that a promoter cannot indefinitely delay conveyance of land on the pretext of exploiting the further additional FSI arising out of the new FSI regime. The judge further held that once a housing society is formed, the promoter has a statutory obligation to execute the conveyance within four months and cannot rely on private contractual clauses to postpone the transfer.

The court observed that any additional FSI arising after the conveyance belongs to the housing society and not the developer. Coming down heavily on the developer's conduct, the court said that the petitioner had already exploited the development potential in the land and that its greed to make more profits was not satisfied.

The court added that it would not allow its extraordinary jurisdiction to be used to help a developer “endlessly” exploit development potential. The ruling is a significant victory for the housing society, which had been seeking deemed conveyance for several years.

The case highlights the importance of the Maharashtra Ownership Flats Act (MOFA) in protecting the rights of flat purchasers. The Act requires developers to convey the land and building to the society within a specified timeframe, and the court's ruling reinforces this requirement.

The decision is also a warning to developers who attempt to delay conveyance in order to exploit additional FSI. The court's criticism of the developer's conduct suggests that such tactics will not be tolerated, and that the rights of flat purchasers will be protected.

In conclusion, the Bombay High Court's ruling is a significant development in the realm of real estate law in Mumbai. It reinforces the importance of the Maharashtra Ownership Flats Act (MOFA) and protects the rights of flat purchasers. The decision is a victory for the housing society and a warning to developers who attempt to exploit the system for their own gain.

The ruling has significant implications for the real estate industry in Mumbai, and it is likely to have a positive impact on the rights of flat purchasers. It is a reminder that the courts will not hesitate to intervene in cases where developers attempt to exploit the system, and that the rights of flat purchasers will be protected.

The Bombay High Court's decision is a testament to the importance of the judiciary in protecting the rights of citizens. It is a reminder that the courts are a vital check on the power of developers and that they will not hesitate to intervene in cases where the rights of flat purchasers are being exploited.

In the end, the ruling is a victory for justice and a reminder that the rights of flat purchasers will be protected. It is a significant development in the realm of real estate law in Mumbai, and it is likely to have a positive impact on the industry as a whole.