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Supreme Court of India
Angeline Randolph Pereira vs Suyog Industrial Estate Premises Co … on 21 April, 2025
Author: Abhay S. Oka
Bench: Abhay S Oka
2025 INSC 524
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5377 OF 2025
(Arising out of Special Leave Petition (C) No.5432 of 2021)
ARUNKUMAR H SHAH HUF … APPELLANTS
versus
AVON ARCADE PREMISES
CO-OPERATIVE SOCIETY
LIMITED & ORS. ... RESPONDENTS
J U D G M E N T
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
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
the controversy, a brief reference to the facts of the case
Date: 2025.04.21
18:45:08 IST
Reason:
would be necessary.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 1 of 42
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 1 st 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 30 th June 1983.
4. A deed of dissolution of partnership was executed
on 13th February 1987 (‘the deed of dissolution’) by which
the firm was dissolved. The larger plot was partitioned
between one Lalbhai H. Shah (predecessor of the 2 nd to 5th
respondents) and one Arun H. Shah (the Karta of the
appellant). Under the deed of dissolution dated 13 th
February 1987, the portion of the larger plot shown in a
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verged blue colour line on a plan attached (for short,
‘Lalbhai Plot’) was allotted to Lalbhai, being the Manager
and Karta of Lalbhai Hiralal Shah HUF. The remaining
portion of the larger plot below building No.3 and the
land surrounding it, shown in a verged yellow line (for
short ‘the Arun Plot’), was allotted to Arun as the Karta
and manager of Arun Hiralal Shah HUF (the appellant). It
was provided that construction on the Lalbhai Plot will be
restricted to the development potential thereof, and the
construction on the Arun Plot will be restricted to the
development potential thereof in accordance with the
prevailing Development Control Regulations. Lalbhai
took over the firm as the sole proprietor. It was provided
that if Lalbhai transfers his interest in favour of an
organisation of flat purchasers, then Lalbhai/such
organisation would execute a perpetual lease in favour of
the appellant or its nominees in respect of the Arun plot.
5. 10th Respondent firm was constituted with Lalbhai
as one of its partners by a deed of partnership dated 30 th
Civil Appeal @ SLP (C) No.5432 of 2021 Page 3 of 42
March 1987. Lalbhai brought in the Lalbhai Plot as his
capital contribution to the firm. The 10 th respondent
constructed a building consisting of two wings, each with
ground plus two upper floors on the Lalbhai Plot. The
10th respondent entered into flat purchase agreements
(for short, ‘the FPAs’) from the year 1991 onwards with
the flat purchasers in respect of flats in the building. It
was claimed that the FPAs were executed in terms of
Section 4 of the Maharashtra Ownership Flats
(Regulation of the Promotion of Construction, Sale,
Management and Transfer Act) 1963 (for short, ‘the
MOFA’). On 6th November 1993, the Municipal
Corporation of Greater Mumbai (for short, ‘the MCGM’)
issued an occupation certificate in respect of the building.
It is pointed out by the appellant that the first
respondent, a co-operative society of the flat purchasers
in the building constructed on Lalbhai Plot, was formed
and registered on 15th July 2005.
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6. The first respondent filed a complaint before the
Additional Consumer Disputes Redressal Forum,
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 18 th
September 2020, the said application was allowed. Ex
parte deemed conveyance in respect of the larger plot was
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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 the said
order, Arun Hiralal Shah HUF (the appellant), filed a writ
petition before the Bombay High Court, which was
decided by the impugned judgment and order of the
Bombay High Court. The order of the competent
authority was confirmed. But a liberty was reserved to
the appellant to file a suit for adjudication of the title.
SUBMISSIONS
8. The learned senior counsel appearing for the
appellant invited our attention to the relevant clauses in
the dissolution deed dated 13 th February 1987 by which
the said firm was dissolved. He pointed out that the deed
of dissolution recites that Ranjit (the predecessor of the
6th to 9th respondent) and Arun were not interested in
carrying on the real estate business of the firm. He
Civil Appeal @ SLP (C) No.5432 of 2021 Page 6 of 42
pointed out that the deed of dissolution of the firm
provided that on the dissolution, the goodwill and trade
name of the firm as well as the right to recover all the
outstandings of the said firm shall remain with Lalbhai
who was entitled to carry on the business of the erstwhile
firm as the sole proprietor in the name of M/s. CH Shah
& Sons. However, it was provided that if any rental is
received from any tenant of building No.3, the same shall
be paid over by Lalbhai to Arun without any deduction
whatsoever therefrom. It was also provided that Arun
will bear all the outgoings of the said building No.3. The
learned counsel pointed out that in the deed of
dissolution, it is provided that the portion of the larger
plot shown in verged blue colour line (the Lalbhai Plot)
shall belong to Lalbhai as the Manager and Karta of
Lalbhai Hiralal Shah HUF and the remaining portion of
the said property being building marked no.3 and the
surrounding land shown in verged yellow line on the said
plan (the Arun Plot) shall belong to the present appellant
Civil Appeal @ SLP (C) No.5432 of 2021 Page 7 of 42
(Arun Hiralal Shah HUF). It is also provided in the deed
that the Floor Space Index (FSI) of the Lalbhai plot shall
be utilised by Lalbhai save and except the FSI which is
utilised for the construction of the existing building No.3.
It was provided that the appellant will be entitled to
reconstruct structure or structures in place of existing
building No.3. Another important clause which he
pointed out was that after Lalbhai develops the remaining
property excluding building No.3, the incorporated body
of the purchasers of the premises in the redeveloped
property/ Lalbhai shall 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 11 th respondent was to enforce the
rights of the first respondent society and the
Civil Appeal @ SLP (C) No.5432 of 2021 Page 8 of 42
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.1. 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 1 st
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 amenable to the jurisdiction of the
11th respondent.
10. After noticing that serious disputed questions
regarding the title and demarcation of the land were
arising, the competent authority ought to have directed
1 (2012) SCC Online Bombay 1266
Civil Appeal @ SLP (C) No.5432 of 2021 Page 9 of 42
the first respondent society to file a suit. Relying upon
the judgment of the learned Single Judge of Bombay High
Court in the case of Marathon Next Gen Realty Ltd.,
Mumbai and another v. Competent Authority, District
Deputy Registrar of Co-Operative Societies, Mumbai
and others2, the learned counsel submitted that the
competent authority under Section 5A of the MOFA is not
empowered to adjudicate upon the disputed questions of
fact and the questions which will have impact on third
parties. He submitted that the competent authority is not
empowered to decide any lis between the parties. He
relied upon another decision of a learned Single Judge of
the Bombay High Court in the case of ACME Enterprises
and Another v. Deputy Registrar, Co-operative
Societies and Others3. Learned counsel also placed
reliance on a decision of this Court in the case of Abdul
Kuddus v. Union of India4. He submitted that the
competent authority is not empowered to receive any
2 (2015) 5 Maharashtra Law Journal 318
3 (2023) SCC Online Bombay 1102
4 (2019) 6 SCC 604
Civil Appeal @ SLP (C) No.5432 of 2021 Page 10 of 42
evidence. He submitted that the order passed by the
competent authority under Section 11(4) of the MOFA is
not final inasmuch as the registration officer is
empowered under Section 11(5), after hearing the parties,
to decide whether such a unilateral deed of conveyance
ought to be registered or not.
11. Learned counsel appearing for the appellant
submitted that the impugned order of the competent
authority dated 18th September 2020 is as vague as
possible, and even the terms and conditions on which the
permanent lease deed is to be executed by and between
the appellant and the first respondent have not been
specified.
12. Another submission of the learned counsel
appearing for the appellant is that the first respondent
had already filed a consumer complaint before the State
Consumer Disputes Redressal Commission (the State
Commission) and therefore, the first respondent should
not have taken recourse to the proceedings under the
Civil Appeal @ SLP (C) No.5432 of 2021 Page 11 of 42
MOFA. Lastly, he submitted that the High Court ought to
have interfered and set aside the impugned order of the
competent authority.
13. Learned senior counsel appearing for the first
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 10 th
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 11 th 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 1 st
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.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 12 of 42
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 10 th 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 10 th respondent was to
execute a conveyance within four months from the date of
registration of the first respondent society. He submitted
that the execution of the conveyance in respect of the
larger plot has been pending for over three decades, and
the appellant, in collusion with the 10 th respondent, has
always been making efforts to delay the execution of the
conveyance.
15. He invited our attention to Rule 13 and other
relevant rules forming part of the Maharashtra
Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Rules,
1964 (for short, ‘the MOFA Rules’), which explain the
powers of the competent authority. He also invited our
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attention to the object of incorporating Section 11(3) of
the MOFA with effect from 25th February 2008. The object
was to curb malpractices by the developers. The object of
the said amended provision is to safeguard the interests
of flat purchasers. After inviting our attention to various
provisions contained in the MOFA Rules, learned counsel
appearing for the first respondent relied upon a decision
of this Court in the case of Indian National Congress (I)
v. Institute of Social Welfare & Ors. 5. He submitted
that, looking to the powers of the competent authority, it
is required to adhere to the principles of natural justice
and act judicially. He submitted that the object of the
provisions of the MOFA cannot be defeated by allowing
parties to raise frivolous disputes. The learned counsel
relied upon a decision of the Bombay High Court in the
case of Tanish Associates & Ors. v. State of
Maharashtra & Ors.6 , which was confirmed by this
Court. He also relied upon observations made in
5 (2002) 5 SCC 685
6 (2016) SCC Online Bombay 12653
Civil Appeal @ SLP (C) No.5432 of 2021 Page 14 of 42
paragraph 7 of the decision of the learned Single Judge of
the Bombay High Court in the case of Tanish
Associates & Ors.6. He also relied upon a decision of the
Bombay High Court in the case of Subash Ramchandra
Navare v. Premji Megji Rambia & Ors. 7. He submitted
that the observations made in paragraph 7 of the said
decision protect the appellant. He also relied upon a
decision of the Bombay High Court in the case of Mazda
Construction Company & Ors.1, which was relied upon
by the appellant. He submitted that the decision of the
learned Single Judge of the Bombay High Court in the
case of Mazda Construction Company & Ors.1 has been
affirmed by a Division Bench of the Bombay High Court
in the case of M/s. Shree Chintamani Builders v. State
of Maharashtra and Ors.8. He also relied upon a
decision of the Bombay High Court in the case of
Mahanagar Housing Partnership Firm and Others v.
7 (2020) SCC Online Bombay 316
8 (2016) SCC Online Bombay 9343
Civil Appeal @ SLP (C) No.5432 of 2021 Page 15 of 42
District Deputy Registrar of Co-operative Societies
(Pune City), Pune and Others9.
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.
9 (2018) SCC Online Bombay 19563
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17. Section 11 is the most important provision, which
calls for interpretation in this appeal. Section 11 reads
thus:
“11. – Promoter to convey title, etc.,
and execute documents, according to
agreement(1) A promoter shall take all necessary
steps to complete his title and convey to
the organisation of persons, who take
flats, which is registered either as a co-
operative society or as a company as
aforesaid or to an association of flat
takers [or apartment owners], his right,
title and interest in the land and
building, and execute all relevant
documents therefor in accordance with
the agreement executed under section 4
and if no period for the execution of the
conveyance is agreed upon, he shall
execute the conveyance within the
prescribed period and also deliver all
documents of title relating to the
property which may be in his possession
or power.
(2) It shall be the duty of the promoter to
file with the Competent Authority, within
the prescribed period, a copy of the
conveyance executed by him under sub-
section (1).
(3) If the promoter fails to execute the
conveyance in favour of the
Cooperative society formed under
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section 10 or, as the case may be, the
Company or the association of
apartment owners, as provided by sub-
section (1), within the prescribed
period, the members of such Co-
operative society or, as the case may
be, the Company or the association of
apartment owners may, make an
application, in writing, to the
concerned Competent Authority
accompanied by the true copies of the
registered agreements for sale,
executed with the promoter by each
individual member of the society or
the Company or the association, who
have purchased the flats and all other
relevant documents (including the
occupation certificate, if any), for
issuing a certificate that such society,
or as the case may be, Company or
association, is entitled to have an
unilateral deemed conveyance,
executed in their favour and to have it
registered.
(4) The Competent Authority, on
receiving such application, within
reasonable time and in any case not
later than six months, after making
such enquiry as deemed necessary
and after verifying the authenticity of
the documents submitted and after
giving the promoter a reasonable
opportunity of being heard, on being
satisfied that it is a fit case for issuing
such certificate, shall issue a
certificate to the Sub-Registrar or any
other appropriate Registration Officer
Civil Appeal @ SLP (C) No.5432 of 2021 Page 18 of 42
under the Registration Act, 1908,
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
Civil Appeal @ SLP (C) No.5432 of 2021 Page 19 of 42
land and the building developed by him. Sub-section (3)
of Section 11 gives a remedy to a cooperative society or a
company formed under Section 10 or the association of
apartment owners, as the case may be, to apply to the
competent authority appointed under Section 5A for
issuing a certificate that the said society or the company,
as the case may be, is entitled to have unilateral deemed
conveyance executed in their favour and have it
registered. This provision has been enacted to ensure
that a speedy remedy is available to the flat purchasers
for enforcing the promoter’s obligation under sub-section
(1) of Section 11. The MOFA has been enacted with the
object of protecting the flat purchasers.
19. The procedure for dealing with applications made
under sub-section (3) of Section 11 has been laid down in
the MOFA Rules. Rule 11(2) provides for the competent
authority to issue a notice of the application to the
promoter. Even the form of application under Section
11(3) has been prescribed by the MOFA Rules. Under
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Rule 13(3), the opponent to whom a notice is issued is
entitled to file a written statement. Rule 13(4) permits
the production of documents. Sub-rule (5) of Rule 13
provides for the procedure for the hearing of the
application. It provides that on receiving a written
statement of the opponent, the applicant shall prove the
contents of the application and also deal with the
contention of the defence. However, it is specifically
provided that no cross-examination of any of the parties
shall be permitted. Clause (c) of sub-rule (5) of Rule 13
provides that the outer limit for passing an order on a
Section 11 application is six months. It provides that the
competent authority shall make such enquiry as may be
deemed necessary, and after verifying the authenticity of
the documents submitted by the parties and after
hearing them, the competent authority shall pass an
order. The requirement to comply with the principles of
natural justice is also incorporated in clause (c).
Considering the nature of the power conferred on the
Civil Appeal @ SLP (C) No.5432 of 2021 Page 21 of 42
competent authority, it follows that while passing orders
on the application under Section 11(3), the competent
authority must record reasons.
20. It is undoubtedly true that quasi-judicial powers
have been conferred upon 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 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.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 22 of 42
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 has to be issued by the competent authority
to the appropriate registration officer under the 1908 Act.
After receiving the certificate, the registration officer is
required to issue a summons to the promoter to show
cause why such a unilateral instrument should not be
registered as a deemed conveyance. After giving an
opportunity of being heard to the promoter and after
Civil Appeal @ SLP (C) No.5432 of 2021 Page 23 of 42
being satisfied that it was a fit case for registration of a
unilateral conveyance, the registration officer can register
the certificate as deemed conveyance. We may make it
clear that the power conferred on the registration officer
does not enable him to reopen or set aside the findings
recorded by the competent authority while passing an
order of grant of certificate. The registration officer is
neither an appellate authority nor a revisional authority.
23. The requirement of sub-section (5) of Section 11 has
been incorporated to enable the registering officer to give
an opportunity to the promoter, as the certificate issued
by the competent authority is a “unilateral certificate”. In
a given case, there may be a statutory requirement of
obtaining prior permission or consent of an authority
before the execution and registration of a conveyance.
The registering officer cannot register the instrument
unless such statutory consent/permission is produced.
Therefore, he can refuse to register the certificate of
deemed conveyance till the permission/consent is
Civil Appeal @ SLP (C) No.5432 of 2021 Page 24 of 42
produced. There may be a prohibitory order of a
competent court restraining the promoter from executing
a conveyance. In such a case, the certificate cannot be
registered as a conveyance till the restraint order is in
force. Moreover, the registering officer must be satisfied
that the requirements, such as payment of stamp duty
and other procedural requirements under the 1908 Act,
are complied with. This is the limited scope of
adjudication by the registering officer under sub-section
(5) of Section 11. 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 has
no power to go into the correctness or otherwise of the
order of the competent authority. He can refuse
registration only on the grounds indicated above. Thus,
the scope of the powers conferred on the registering
officer is limited as indicated above. This is the only way
sub-sections (4) and (5) of Section 11 of the MOFA can be
harmoniously construed.
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ON FACTUAL ASPECTS
24. A perusal of the deed of dissolution dated 13 th
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
Civil Appeal @ SLP (C) No.5432 of 2021 Page 26 of 42
provided that the right to develop the Lalbhai plot was
allotted to Lalbhai, and the right to develop the remaining
portion of the said property, being building No.3 and the
land surrounding it, shown in a verged yellow line (the
Arun plot), was allotted to Arun. Even the valuation of
the properties was mentioned. Clause 6 reiterates that
the Arun plot on the plan Exhibit ‘A’ shall belong to Arun
HUF, representing the present appellant.
25. We may note here that there was a subsequent
partnership deed entered into on 30 th March 1987 by and
between Lalbhai and six other persons under which the
firm Avon Enterprises (the 10th respondent) was
incorporated. In the recitals of the said document, it is
mentioned that the larger property, being the entire plot
No.61, is delineated on a plan annexed to the said
document. It refers to a portion admeasuring 1823 sq
mtrs. thereof, which was brought into partnership by
Lalbhai. It is stated that the said portion is shown in
blue verged lines. That is the Lalbhai plot. It is also
Civil Appeal @ SLP (C) No.5432 of 2021 Page 27 of 42
specifically provided that the remaining portion of the
said property on which building No.3 has been standing
and the area shown by yellow verged lines (the Arun plot)
will belong to Arun.
26. A prototype flat purchase agreement (FPA) between
the 10th respondent and the flat purchasers has been
placed on record. It refers to the property described as
the said property admeasuring 1911.32 sq.mtrs. out of
the larger plot. It is recorded that the remaining portion
of the plot, admeasuring 903.06 sq. mtrs, on which
building No.3 was standing, belongs to the appellant. The
first schedule describes the larger property admeasuring
2814.38 sq. mtrs. (which includes the setback area) and
the second schedule describes the area of 1911.32 sq.
mtrs. Clause No.36 of the agreement is the relevant
clause which deals with the execution of the conveyance.
The relevant portion of the clause reads thus:
“……the Developer shall execute a
Conveyance in respect of the said
Property in favour of such Co-
operative Society subject to the said
Civil Appeal @ SLP (C) No.5432 of 2021 Page 28 of 42
Deed of Lease dated 16th day of July,
1991 in respect of Arun’s property in
favour of Arun Hiralal Shah H.U.F.
and/or his nominee or nominees as
aforesaid. Until the execution of the
Conveyance the possession of the said
Property in the said Building and the
Premises thereon shall be deemed to be
of the Developers and the Purchasers
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 theCivil Appeal @ SLP (C) No.5432 of 2021 Page 29 of 42
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 dispute about the execution of the deed
of dissolution. There is no dispute that the area allotted
to Lalbhai for development is separate and distinct from
the area allotted to Arun. The area allotted to Lalbhai is
1911.32 sq mtrs. (the Lalbhai plot) out of final plot No.61,
which includes the area of the road set back
admeasuring 131.40 sq mtrs. The remaining area of
903.06 sq mtrs. (the Arun plot) was allotted to Arun
representing HUF out of the final plot No.61 on which
building No.3 has been standing. The deed of dissolution
specifically provides that the said area allotted to Arun as
the Karta and manager of Arun Hiralal Shah HUF (the
appellant) has been shown on the plan annexed to the
deed of dissolution. It consists of the building marked as
building No.3 and the surrounding land shown in yellow
lines. The deed of dissolution and in particular sub-
Civil Appeal @ SLP (C) No.5432 of 2021 Page 30 of 42
clause (f) of clause 8 clearly provides that Arun,
representing the appellant HUF, shall be entitled to
reconstruct the structure or structures in place of
building No.3 and consume Floor Space Index (for short
‘FSI’) to the extent of 9717 sq.ft. Sub-clause (a) of Clause
8 provides that the remaining FSI available in respect of
the entire final plot admeasuring 2814.38 sq.mtrs.
(Lalbhai plot) shall be utilised by Lalbhai. Sub-clause (g)
of clause 8 also provides that in case of a future increase
in FSI, 32% of it shall be owned by Arun, representing
the HUF, and the remaining FSI shall be utilised by
Lalbhai. There is one important clause incorporated in
the deed of dissolution in the form of sub-clause (h) of
Clause 8. Sub-clause (h) reads thus:
“h) that Lalbhai in the process of his
business as developer and dealer in real
estates and consequent upon the
construction of the new building conveys
the property more particular description
of the property is as per Schedule of the
property hereunder written, to a Co-
operative Society and/or similar body
Lalbhai and/or the Co-operative
Society or similar body shall execute a
Lease in perpetuity in favour of ArunCivil Appeal @ SLP (C) No.5432 of 2021 Page 31 of 42
at the cost of Arun including the cost
of stamp and registration charges at
the yearly lease rent of Re.1/- in
respect of building No.3 together with
the land underneath and shown under
yellow verged line in the copy of the
plan hereto annexed upon the terms
and conditions as may be agreed and
settled by the 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
Civil Appeal @ SLP (C) No.5432 of 2021 Page 32 of 42
society formed after the construction of new buildings byLalbhai. 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 Lalbhai Hiralal Shah by
which a firm, Avon Enterprises, the 10 th respondent-
developer, was formed. The said document clearly
specifies that the partnership firm has the right over an
area of 1823 sq. mtrs. out of the larger plot bearing final
plot No.61. It also records that the partners of the 10 th
respondent are aware that the remaining portion of the
property on which building No.3 is standing as shown by
yellow verged lines belongs to the present appellant and
that 10th respondent will not have any claim over the
same.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 33 of 42
31. The said deed of partnership shows that the 10 th
respondent had no right over the property allotted to the
appellant under the deed of dissolution. At this stage, we
may note that in the FPAs for sale executed by the 10 th
respondent in favour of flat purchasers, there is a recital
that the 10th respondent has executed a deed of lease
dated 16th July 1991 in favour of the present appellant in
respect of the area of 903.06 sq.mtrs. out of final plot
No.61. Even in the application under Section 11(3) of the
MOFA made by the 1st respondent, in paragraph 4,
reliance was placed on the lease in perpetuity executed in
favour of the appellant in respect of the Arun plot on 16 th
July 1991 by the 10th respondent. In the reply filed by the
appellant, this fact is not denied. However, a copy of the
lease is not placed on record.
32. The legal heirs of Arun, Lalbhai and Ranjit were the
opponents to the application under Section 11(3) made
by the 1st respondent. The prayer therein was for the
execution of the conveyance in respect of the larger plot in
Civil Appeal @ SLP (C) No.5432 of 2021 Page 34 of 42
favour of the 1st respondent. By the order dated 18 th
September 2020 passed by the competent authority, a
direction was issued in the exercise of powers under
Section 11(3) of MOFA to grant ex parte deemed
conveyance in favour of the first respondent society. A
certificate of deemed conveyance was issued under the
said order. The certificate records that the deemed
conveyance shall be in respect of the entire larger plot
bearing plot No.61 (admeasuring 2753 sq.mtrs. as per
the Property Register Card and 2814.38 sq.mtrs. as per
the Sanctioned Building Plan) subject to the first
respondent executing a permanent lease deed in favour of
the present appellant in respect of an area of 903.06 sq.
mtrs. (Arun plot) as shown on the plan annexed to the
FPAs executed by the 10th respondent in favour of the flat
purchasers. We have already referred to the deed of lease
dated 16th July 1991 executed by the 10 th respondent in
favour of the appellant in respect of the Arun plot.
Therefore, the 10th respondent is the lessor of the
Civil Appeal @ SLP (C) No.5432 of 2021 Page 35 of 42
appellant. Hence, the effect of the order dated 18 th
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 1 st
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 the deed of dissolution,
which we have quoted earlier, and the fact that there was
Civil Appeal @ SLP (C) No.5432 of 2021 Page 36 of 42
already a lease deed dated 16 th July 1991 in favour of the
present appellant. Therefore, it is obvious that the lease
deed to be executed by the first respondent must be in
terms of the deed of dissolution, which provides for the
appellant’s entitlement to a specific FSI and percentage of
additional FSI which may be available in future.
Moreover, the lease to be executed will have to be in
accordance with the terms and conditions of the lease
deed dated 16th July 1991 and the deed of dissolution.
34. In view of the fact that sub-clause (h) of Clause 8 of
the deed of dissolution is binding, the appellant cannot
object to the condition of the first respondent executing a
lease incorporated in the certificate. Sub-clause (h) itself
provides for the Society of the flat purchasers after the
construction of the building by Lalbhai executing a lease
in favour of the appellant for yearly lease rent of Re.1. To
protect the appellant’s interest, the impugned order of the
competent authority dated 18th September 2020 and the
certificate provide for the execution of a permanent lease
Civil Appeal @ SLP (C) No.5432 of 2021 Page 37 of 42
in favour of the appellant. Thus, there will be a perpetual
lease executed by the first respondent in favour of the
appellant or its nominees in terms of sub-clause (h) of
Clause 8 of the deed of dissolution and in terms of the
lease deed dated 16th July 1991 at the instance of the
appellant, no fault can be found with the order of the
competent authority.
35. 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
Civil Appeal @ SLP (C) No.5432 of 2021 Page 38 of 42
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.
CONCLUSIONS
36. As held earlier, there is no reason to find fault with
the impugned order dated 18 th 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 16 th 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 16 th July 1991 and under
Civil Appeal @ SLP (C) No.5432 of 2021 Page 39 of 42
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 sub-
sections (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 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,
Civil Appeal @ SLP (C) No.5432 of 2021 Page 40 of 42
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.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 41 of 42
38. Subject to what is held in this judgment, the appeal
is dismissed. There will be no order as to costs.
………………………….J.
(Abhay S Oka)
…….……………………J.
(Ujjal Bhuyan)
New Delhi;
April 21, 2025.
Civil Appeal @ SLP (C) No.5432 of 2021 Page 42 of 42
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