HC upholds grant of deemed conveyance to Juhu bungalow scheme

A deemed conveyance means a legal document of ownership right over the property (land and building).

Mumbai: The Bombay high court on Wednesday dismissed a petition challenging the grant of deemed conveyance to a bungalow scheme in Juhu, observing that bungalows are covered under the Maharashtra Ownership Flats Act (MOFA), 1963, if they are all constructed and sold as part of a common layout.

“Even assuming that the bungalows were independent, standalone structures, as contented by the petitioners that fact alone would not be enough to exclude the same from the provisions of MOFA, if they were all constructed and sold as part of one common layout,” said a single judge bench of Justice Arif S Doctor. (Getty Images)

A deemed conveyance means a legal document of ownership right over the property (land and building).

“Even assuming that the bungalows were independent, standalone structures, as contented by the petitioners that fact alone would not be enough to exclude the same from the provisions of MOFA, if they were all constructed and sold as part of one common layout,” said a single judge bench of Justice Arif S Doctor.

SM Builders, through its partner KV Satyamurthy, filed the petition challenging the order of August 10, 2018, passed by the District Deputy Registrar, Co-operative Societies–3, Mumbai, granting deemed conveyance to Golden Beach Co-operative Housing Society.

The society of 36 bungalow owners, formed in 1981, had moved the District Deputy Registrar for deemed conveyance, contending that despite the passage of over thirty years, the builder had failed to convey the land, as contemplated in the sale deeds executed by the builder. On August 10, 2018, the registrar accordingly granted the society a deemed conveyance – transferring the entire property in the name of the society.

The developer had moved the high court and contended that since the bungalows were independent standalone structures and not buildings, as contemplated under Section 2(a-1) of the MOFA, they were beyond the purview of the enactment and the District Deputy Registrar had no jurisdiction to grant deemed conveyance to the society of 36 bungalows.

The contention, however, failed to impress upon Justice Arif Doctor. “The petitioner’s entire challenge to the Impugned Order is premised upon a skewed and myopic reading of the provisions of MOFA and the Agreements for Sale and nothing more,” said the single judge bench while dismissing the developer’s petition.

The court said the builder’s contention that the bungalows were independent standalone structures and not buildings as contemplated in Section 2(a-1) of the MOFA and that a flat under Section 2(a-1) of MOFA must necessarily form part of a building was “nothing more than a red herring.”

The bench accepted the society’s contention that what has been constructed and sold are 36 units in 12 blocks comprising 3 units each. “The units though called bungalows under the respective Agreements for Sale would clearly fall within the definition of ‘apartment’ and thus be included in the definition of ‘flat’ under Section 2 (a-1) of MOFA,” the court said.

The bench said in the present case there was no dispute that the builder had constructed and sold the 36 bungalows as part of one common layout and the terms of the said Agreements for Sale in terms provided that the builder would convey the land to the ultimate entity to be formed by the bungalow purchasers.

“Given this, I find that there is not even a modicum of doubt that the said Agreements for Sale were squarely covered by MOFA. In these facts to permit the Petitioners to resile from their obligations under MOFA based solely on the nomenclature used in the Agreements for Sale would amount to putting a premium on dishonesty,” the court added.