Project Features

CIDCO leased Plot No. 4 in Sector 23 of Village Kharghar, Navi Mumbai, measuring 8694.03 square meters (Land), to Balaji Corporation. Balaji Corporation began developing the ‘Delta Central’ project, which included Wings A, B, C, and D. Initial building plan approvals were obtained on April 27, 2017, with revisions and final approvals granted on December 24, 2018, and March 25, 2019.

Balaji Corporation’s Expansion Plans

Balaji Corporation started development with limited utilization of the Floor Space Index (FSI). Ambitious plans soon followed, proposing the construction of Wing E and a Club House. An updated plan for Wing E and additional floors for Wing C received a no-objection certificate on October 11, 2021, and an occupancy certificate on October 29, 2021. Subsequently, individual flat purchasers formed the Society, registered on August 29, 2023.

Conflict

The Society requested conveyance of the Land from Balaji Corporation, which insisted on completing Wing E and additional floors in Wing C before executing the conveyance. The Society sought unilateral deemed conveyance under Section 11 of MOFA, which was granted by the Competent Authority, resulting in the conveyance of the Land.

Present Petition

Balaji Corporation contested the unilateral deemed conveyance order, leading to the filing of this writ petition.

Key Arguments

Balaji Corporation’s Perspective:

i. Lack of Detailed Reasoning:

Counsel for Balaji Corporation argued that the contested order lacked detailed reasoning and did not fully consider Balaji Corporation’s points.

ii. Rule 9 of the Maharashtra Real Estate (Regulation and Development) (Registration of real estate projects, Registration of real estate agents, rates of interests and disclosures on website) (Amendment) Rules, 2019 (RERA Rules)

The counsel drew attention to Rule 9 of the RERA Rules, which states that deemed conveyance can only be sought after the final occupancy certificate for the last building or wing is issued.

iii. Illegality of Competent Authority’s Order:

The counsel contended that the order granting conveyance of the Land, including Wing E, was improper necessitating court intervention.

Society’s Perspective:

i. Adherence to Agreement :

The Society’s counsel supported the contested order, citing clauses in the agreement with flat purchasers that limited the project to four wings.

ii. Occupancy Certificate:

The counsel mentioned that CIDCO issued an occupancy certificate on October 29, 2021, a fact acknowledged by Balaji Corporation, reinforcing the Society’s right to conveyance.

iii. Legality of Competent Authority’s Order

The counsel argued that Balaji Corporation had agreed to convey the entire Land, affirming the legality of the competent authority’s order.

Prior Rulings

The Court referenced the following rulings:

i. ACME Enterprises vs. Deputy Registrar, Cooperative Societies:

This case highlighted the limited role of the competent authority in granting deemed conveyance The competent authority can only convey what the promoter agreed to in the original agreement.

ii. Mazda Construction Company & Others vs. Sultanabad Darshan CHS Ltd. & Others:

The court emphasized that the authority’s duty is to enforce the promoter’s obligations if the promoter fails to do so, but not to extend beyond what was initially agreed upon.

Court’s Order

The court dismissed the writ petition, ruling that the initial project was restricted to four wings and that Balaji Corporation ‘s failure to execute the conveyance justified the unilateral deemed conveyance.

The court upheld the Competent Authority’s decision and noted that Balaji Corporation could pursue a civil suit if it considers that its rights were affected.

Conclusion

This case underscores the legal responsibilities of Promoters and the rights of flat purchasers under MOFA and RERA. It highlights the Competent Authority’s role in ensuring Promoters meet their conveyance obligations, safeguarding flat purchasers’ interests. Importantly, it clarifies that deemed conveyance can only transfer the developer’s legal rights, title, and interest in the property.

This article was originally published in Mondaq on 30 May 2024 Written by: Ashoo Gupta, Partner. Click here for original article

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