TaxTMI 
TaxTMI 
2025 (4) TMI 1835
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....Sanjay Kharde, Sr. Adv., Mr. Satyajeet Kharde, Adv., Mr. Sunny Jadhav, Adv., Mr. Kailas Bajirao Autade, AOR. JUDGMENT ABHAY S. OKA, J. FACTUAL DETAILS 1. Leave granted. 2. This appeal takes exception to the judgment and order dated 25th February 2021 passed by the learned Single Judge of the Bombay High Court. To appreciate the controversy, a brief reference to the facts of the case would be necessary. 3. One Champaben Hiralal Shah owned a plot of land being Final Plot No. 61 in Town Planning Scheme III, Vile Parle (West), admeasuring 2814.38 sq.mtrs. (for short 'the larger plot'). On 1st April 1972, Champaben Hiralal Shah and the Hindu Undivided Family consisting of her three sons, Lalbhai, Ranjit and Arun, constituted a partnership firm M/s. CH Shah & Sons (for short, 'the firm') by executing a deed of partnership. The larger plot was Champaben Hiralal Shah's contribution to the firm's capital. After the death of Champaben, the firm was reconstituted, amongst the rest of the partners, as per the deed of reconstitution dated 30th June 1983. 4. A deed of dissolution of partnership was executed on 13th February 1987 ('the deed of dissolution') by wh....
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....um, Mumbai, seeking conveyance of only the Lalbhai Plot. The District Forum allowed the complaint and directed the 10th respondent to convey the Lalbhai plot to the first respondent by order dated 19th August 2017. 7. Thereafter, on 13th January 2020, the first respondent filed an application under Section 11(3) of the MOFA seeking a deemed conveyance of the Lalbhai Plot along with the portion of Arun Plot (totally admeasuring 2,753 sq. mtrs). The conveyance was sought of the larger plot. But after taking into account the road setback area of 131.40 sq. meters, the area thereof was mentioned as 2753 sq meters. The application was filed before the District Deputy Registrar, Co-operative Societies, Mumbai City [3] (11th respondent), being the competent authority appointed under Section 5A of the MOFA. On 18th September 2020, the said application was allowed. Ex parte deemed conveyance in respect of the larger plot was granted, and a certificate of deemed conveyance was issued to the first respondent on the condition of the first respondent executing a permanent lease in respect of the Arun Plot in favour of Arun Hiralal Shah HUF (the appellant) or its nominees. Being aggrieved by ....
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....all execute a lease in perpetuity in favour of Arun at nominal yearly lease rent of Re.1 in respect of the Arun plot. 9. Thereafter, the learned counsel invited our attention to the order dated 18th September 2020 passed by the 11th respondent, which is the competent authority within the meaning of Section 5A of the MOFA. He submitted that the power of the 11th respondent was to enforce the rights of the first respondent society and the corresponding obligation of the 10th respondent developer to execute the conveyance in terms of the agreements executed in favour of the flat purchasers. Learned counsel relied upon a decision of the Bombay High Court in the case of Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd. & Ors. [(2012) SCC Online Bombay 1266]. He submitted that the Arun Plot allotted to Arun under the deed of dissolution was not the subject matter of the agreement between the 10th respondent and members of the 1st respondent society. Therefore, the 11th respondent had no jurisdiction to pass an order granting deemed conveyance to the first respondent in respect of the Arun Plot allotted to the appellant. He further submitted that the appellant was not am....
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....t respondent on facts submitted that the larger plot was not subdivided after the execution of the deed of dissolution, and the building constructed by the 10th respondent developer is an extension of the building No. 3. He submitted that no prejudice has been caused to the appellant by the impugned order of the 11th respondent, as admittedly the appellant will be entitled to perpetual leasehold rights in respect of land below building No. 3 and the land abutting thereto (the Arun Plot). He invited our attention to the FPAs between the members of the 1st respondent and the 10th respondent under the MOFA. He submitted that the leasehold rights of the appellant have been protected under the impugned order passed by the 11th respondent. 14. He submitted that there are 93 flat purchasers who are members of the first respondent. Even after the grant of the occupation certificate, the 10th respondent delayed the execution of the conveyance. He pointed out that the occupation certificate was granted as far back as in 1993. In fact, the obligation of the 10th respondent was to execute a conveyance within four months from the date of registration of the first respondent society....
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....Shree Chintamani Builders v. State of Maharashtra and Ors. [(2016) SCC Online Bombay 9343]. He also relied upon a decision of the Bombay High Court in the case of Mahanagar Housing Partnership Firm and Others v. District Deputy Registrar of Co-operative Societies (Pune City), Pune and Others [(2018) SCC Online Bombay 19563]. CONSIDERATION POWER OF THE COMPETENT AUTHORITY UNDER SECTION 11 OF THE MOFA 16. Now, we turn to the scope of powers conferred on the competent authority under the MOFA. The term 'promoter' is defined in Section 2(c), which means a person or a partnership firm or a body or association of persons who constructs or causes to be constructed a building consisting of flats or apartments. Thus, the developer (10th respondent) is a promoter. Under Section 4(1) of the MOFA, a promoter is required to execute a registered agreement for sale in favour of the flat purchasers in the form prescribed under the MOFA Rules. Under Section 10, it is the promoter's obligation to take steps to form a cooperative society or a company representing the flat purchasers. 17. Section 11 is the most important provision, which calls for interpretation in this appeal. Section....
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....08, certifying that it is a fit case for enforcing unilateral execution, of conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the applicant, as deemed conveyance. (5) On submission by such society or as the case may be, the Company or the association of apartment owners, to the Sub-Registrar or the concerned appropriate Registration Officer appointed under the Registration Act, 1908, the certificate issued by the Competent Authority alongwith the unilateral instrument of conveyance, the Sub-Registrar or the concerned appropriate registration Officer shall, notwithstanding anything contained in the Registration Act, 1908, issue summons to the promoter to show cause why, such unilateral instrument should not be registered as 'deemed conveyance' and after giving the promoter and the applicants a reasonable opportunity of being heard, may on being satisfied that it was fit case for unilateral conveyance, register that instrument as, 'deemed conveyance '." (emphasis added) 18. Thus, sub-section (1) of Section 11 contains the obligation of the promoter to convey title in respect of the land and the bui....
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....competent authority under Section 11(3) are of summary nature, as can be seen from the MOFA Rules. Even cross-examination of the parties is not permissible. There is an absolute prohibition under Rule 13(5) on cross-examination of parties. Thus, it follows that the competent authority, while following the summary procedure, cannot conclusively and finally decide the questions of title. Therefore, notwithstanding the order made under sub-section (4) of section 11, aggrieved parties can always file a civil suit for establishing their rights. 21. The parties have relied upon several decisions of the Bombay High Court. We do not think that any of the decisions have taken a view which is contrary to the legal position explained by us, though none of the decisions exhaustively deal with the issues which we have considered. SCOPE OF THE POWERS OF THE REGISTRATION OFFICERS UNDER SECTION 11(5) 22. Now, we deal with the scope of powers of the registration officer under the Registration Act, 1908 (for short, 'the 1908 Act') under sub-section (5) of Section 11. As provided in sub-section (4) of Section 11, a certificate regarding the entitlement of the applicant to deemed conveyance h....
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....and (5) of Section 11 of the MOFA can be harmoniously construed. ON FACTUAL ASPECTS 24. A perusal of the deed of dissolution dated 13th February 1987 shows that Lalbhai, Ranjit and Arun were the three parties to the deed of dissolution who were the partners of the firm. The brothers executed the deed of dissolution after the demise of their mother Champaben. The description of the larger plot in the schedule to the deed of dissolution is final plot No. 61 admeasuring 2726 sq. mtrs. more particularly described in the schedule. The setback area of 131.40 sq. mtrs. has been excluded. There is a plan annexed to the deed of dissolution marked as Exhibit 'A'. It is provided in the deed of dissolution that the goodwill and trade name of the firm, as well as the right to recover all the outstandings of the said firm, have been taken over by Lalbhai and accordingly, he was entitled to use the goodwill and trade name of the firm and continue the business of the firm as the sole proprietor of M/s CH Shah & Sons with authority to collect outstandings of the said firm in respect of building No. 3 which is allotted to Arun. It was provided that the right to develop the Lalbhai pl....
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....sers who shall have been given possession of the premises sold to him/her/them shall be merely occupants thereof." (emphasis added) 27. At this stage, we may also refer to the deed of dissolution dated 13th February 1987 ('the deed of dissolution'). Arun Hiralal Shah, the erstwhile Karta of the appellant, is a party to the said dissolution deed. Clause 3 thereof reads thus : "3. On such Dissolution the portion of the said property shown in verged blue colour line on the said plan with right to develop the same is allotted to Lalbhai being the party of the First Part as the Manager and Karta of Lalbhai Hiralal Shah H.U.F. The remaining portion of the said property being building marked No. 3 on the said plan Exhibit "A" hereto and assessed to tax by the Municipal Corporation of Greater Bombay vide No. KW-8653 (3) which is let out to Bank of Baroda, Post Office, a Shop and other residential Tenants, as per the particulars given in Exhibit 'B' hereto and the land surrounding it and shown in verged yellow line on the said plan is allotted to Arun being the Party of the Third Part as the Karta and Manager of Arun Hiralal Shah, H.U.F." 28. There is no ....
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....respective advocates of Arun and Lalbhai." (emphasis added) 29. The first part of clause (h) provides for Lalbhai executing a conveyance in respect of the property as per the schedule to a co-operative society. The property described in the schedule is the larger plot. The reason for providing the execution of conveyance in favour of a co-operative society in respect of the larger plot is apparent. The larger plot bearing the plot No. 61 was not subdivided into the Arun plot and the Lalbhai plot in the records. Therefore, Lalbhai and Arun agreed to share the FSI, which may be available in future, to the extent of 68% and 32% respectively. This is why this clause provides for the execution of a lease in respect of the Arun plot in favour of Arun by Lalbhai or a cooperative society formed after the construction of new buildings by Lalbhai. This is to protect the interests of the appellant. Admittedly, the deed of dissolution has been signed by Arun in his capacity as Karta of Arun Hiralal Shah HUF. Therefore, the deed of dissolution and the aforesaid clause are binding on the present appellant. 30. Based on the deed of dissolution, a deed of partnership was executed by ....
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....ondent in favour of the flat purchasers. We have already referred to the deed of lease dated 16th July 1991 executed by the 10th respondent in favour of the appellant in respect of the Arun plot. Therefore, the 10th respondent is the lessor of the appellant. Hence, the effect of the order dated 18th September 2020 is that there shall be a deemed conveyance in favour of the first respondent in respect of the entire larger plot (final plot no.61) subject to the condition of executing a permanent lease deed in favour of the appellant or its nominees in respect of an area of 903.06 sq. mtrs. (the Arun plot). This order appears to have been passed, as plot No. 61 has not been subdivided into Lalbhai plot and Arun plot. Moreover, the 1st respondent, after a conveyance in its favour, steps into the shoes of the appellant's lessor. 33. Some criticism is made by the appellant of the impugned order of the competent authority on the ground that the terms and conditions of the lease have not been incorporated in the order and the certificate, and therefore, the order is vague. We may note here that the impugned order of the competent authority refers to sub-clause (h) of clause 8 of th....
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....ted. CONCLUSIONS 36. As held earlier, there is no reason to find fault with the impugned order dated 18th September 2020 of the competent authority and consequently, the impugned order of the High Court. The registration of the certificate issued under the impugned order of the competent authority shall be subject to the condition of the first respondent executing a permanent lease in favour of the appellant, as directed in the certificate appended to the impugned order dated 18th September 2020. The lease shall be on the terms and conditions incorporated in the deed of dissolution and the lease deed dated 16th July 1991. Even if such a lease is not executed in favour of the appellant, the rights of the appellant as a perpetual lessee under the deed dated 16th July 1991 and under the deed of dissolution in respect of the Arun plot shall remain unaffected. The first respondent cannot dispute the appellant's rights as a perpetual lessee. 37. Our conclusions on the interpretation of subsections (4) and (5) of Section 11 of the MOFA are as under: i. It is no doubt true that quasi-judicial powers have been conferred on the competent authority while dealing with app....