The Plot, the Builder, and the Buildings

The dispute centres on a large plot of land in Vile Parle, admeasuring 21,736 square metres, bearing CTS No. 69/6 (PT) and CTS No. 35 of Village Vile Parle. The developer, Kiran Builders Pvt. Ltd., undertook phased construction on this land over several decades, eventually completing twelve buildings — numbered A to H, J, K, L, and M.

The flat buyers of the first ten buildings (A to H, J and K) formed Kalpita Enclave Co-operative Housing Society Ltd. (Respondent No. 1). When buildings L and M were subsequently completed and their occupancy certificates issued in November 1990, their residents formed two separate societies — Kalpita Enclave Building No. L CHSL (Respondent No. 2) and Kalpita Enclave Building No. M CHSL (Respondent No. 3).

All three societies wanted what the law entitled them to: conveyance of the land on which their buildings stood.

Four Decades of Dispute

The conflict between the builder and the societies did not begin in 2017. It stretches back to 1985.

When Kiran Builders proposed constructing four additional buildings — L, M, N, and P — on the plot by utilising FSI flowing from land surrendered for a 44-feet Development Plan road, Respondent No. 1 Society was opposed. It filed S.C. Suit No. 3226 of 1985 before the City Civil Court, Bombay, seeking conveyance of the entire land of 21,736 sq. mtrs in its favour and effectively challenging the developer’s expansion plans.

During the pendency of that suit, Kiran Builders succeeded in constructing buildings L and M, which received their occupancy certificates in November 1990. The City Civil Court, taking note of this changed reality, passed a decree on November 7, 1997, directing conveyance of only the land appurtenant to buildings A to H, J and K in favour of Respondent No. 1 Society. The prayer for conveyance of the entire land was not granted.

Respondent No. 1 Society challenged this decree before the Bombay High Court in First Appeal No. 1091 of 2000. That appeal remained pending for sixteen years.

By 2016, the picture had changed further. Two more societies had formed in buildings L and M. Respondent No. 1 Society reconsidered its approach — rather than fighting for the entire land solely for itself and excluding the other two societies, it chose to join hands with Respondent Nos. 2 and 3 and seek joint conveyance of the entire land. On September 16, 2016, Respondent No. 1 withdrew First Appeal No. 1091 of 2000, expressly stating its intention to apply for deemed conveyance. All three societies then filed a joint application under Section 11(3) of MOFA before the District Deputy Registrar, Co-operative Societies-3, Mumbai, who also functions as the Competent Authority under MOFA.

On May 15, 2017, the Competent Authority granted a certificate of unilateral deemed conveyance of the entire land admeasuring 21,736 sq. mtrs in favour of the three societies.

Kiran Builders challenged this order before the Bombay High Court in Writ Petition No. 9694 of 2017. The High Court admitted the petition in March 2024 and stayed the operation of the deemed conveyance order pending final hearing. The petition was finally decided on June 18, 2026.

The Three Grounds Raised by the Builder

Kiran Builders raised three principal grounds to challenge and resist the deemed conveyance order.

Ground One: The 1997 Civil Court Decree

The builder’s first argument was that the decree dated November 7, 1997 passed by the City Civil Court had attained finality — since Respondent No. 1’s First Appeal was withdrawn — and that this decree, which directed conveyance of only the land appurtenant to buildings A to H, J and K, created a binding determination that could not be overridden by the Competent Authority under MOFA. The builder contended that the Competent Authority had no jurisdiction to pass an order contrary to what the Civil Court had already decided.

The court rejected this argument. Justice Sandeep V. Marne held that the 1985 suit was filed in an entirely different context — at a time when only buildings A to H, J and K existed and Respondent Nos. 2 and 3 had not yet been formed. The 1997 decree accordingly directed conveyance of only the land appurtenant to those buildings, since buildings L and M had come up during the pendency of the suit and the court had to accommodate that reality. Respondent Nos. 2 and 3 were not parties to the suit or to the First Appeal. A decision on land entitlement could not have been effectively rendered without hearing them.

The court held that it is always open to a party to withdraw a conveyance suit and file an application for deemed conveyance instead. Legislature had consciously provided this faster remedy under amended MOFA. Since the suit itself could have been withdrawn with liberty to seek deemed conveyance, the same course was equally available during pendency of the appeal. The objection of res judicata was also repelled since the appeal was withdrawn expressly for the purpose of filing a deemed conveyance application — not as an abandonment of the claim.

Ground Two: Reserved and Surrendered Land

The builder’s second argument was that the Competent Authority had erred in conveying the entire land of 21,736 sq. mtrs, since portions of that land had already been surrendered for a DP road or were reserved in the Development Plan for a municipal market and a primary school. These portions, the builder argued, could not legally be conveyed to the societies.

On this ground, the court agreed with the builder — but only partially, and the societies themselves conceded the point. Respondent Nos. 1 to 3 voluntarily offered to exclude not just the three portions flagged by the builder, but two additional ones: land admeasuring 123.12 sq. mtrs taken over by MCGM in 2001 for widening of Sahar Road, and land admeasuring 2,328.41 sq. mtrs encroached upon by slum dwellers and lying outside the societies’ compound wall.

The total deductions worked out to 4,711.65 sq. mtrs, reducing the conveyance area to 16,584.55 sq. mtrs. The court accepted this and held that the Competent Authority had committed an error in directing conveyance of the full 21,736 sq. mtrs — an error that needed correction.

Ground Three: Future Construction of Buildings N and P

This was the builder’s most ambitious argument, and the one the court dealt with most firmly.

Kiran Builders contended that it retained the right to construct two more buildings — N and P — on the plot, on the basis of plans sanctioned in 1983. It argued that conveyance could not be granted until the entire layout development was complete, and that even the 16,584.55 sq. mtrs sought by the societies could not be conveyed since Buildings N and P would come up on that land.

The court traced the history of this claim carefully. The construction of buildings N and P was always premised on the builder’s belief that the land surrendered for the DP road measured 2,200 sq. mtrs — which would have generated sufficient FSI for four additional buildings, L, M, N, and P. However, when the actual area surrendered was determined to be only 1,859 sq. mtrs, the FSI available was reduced, allowing construction of only buildings L and M. Buildings N and P could not be built.

Critically, this was not a recent discovery. MCGM had communicated this position to Kiran Builders in a letter dated April 23, 1991 — over three decades ago — explicitly stating that there was no balance FSI in lieu of the DP road and that construction of buildings N and P was not possible.

Faced with this, the builder advanced a novel argument: that it expected to receive development rights — possibly in the form of Transferable Development Rights (TDR) — when the lands reserved for the municipal market and primary school were eventually acquired by the Municipal Corporation, and that it intended to use those rights to construct buildings N and P.

The court called this argument “preposterous to the core” and dismantled it on six grounds. First, there is no certainty that the Planning Authority will ever acquire those reserved lands — if they are not acquired within the stipulated period, the land owner can invoke Section 127 of the Maharashtra Regional and Town Planning Act, 1966 and have the reservations lifted. Second, if the lands are acquired, the builder’s entitlement is to compensation — monetary or through TDR. Third, TDR, if issued through a Development Rights Certificate, is freely tradable and can be used in any other project or sold in the market — there is no obligation to use it on the subject land. Fourth, the builder retains ownership of the slum land, which can be independently redeveloped using any TDR received. Fifth, and as the court underlined most importantly, compensation received for acquired land — whether monetary or in TDR form — cannot be treated as a development potential for the land being conveyed to the societies. Once land is acquired, it is separated from the layout entirely. Sixth, the acquisitions have not happened yet, and cooperative of neighbouring landowners required for the process is absent — making the entire premise even more uncertain.

The court also invoked the settled legal position established by the Division Bench of the Bombay High Court in Lakeview Developers vs. Eternia Co-operative Housing Society Ltd. (2015), which held that a developer cannot exploit building potential for eternity without conveying land to the society. Once the full development potential is exhausted and the obligation to convey has arisen, any future FSI or TDR that may become available cannot be used to justify withholding conveyance. This principle was reiterated in Rajkumar Gulati and Ors. vs. S.D. Corporation Pvt. Ltd. and Ors. (2025).

The Court’s Order

Justice Marne held that the Competent Authority was fully justified in exercising jurisdiction under Section 11 of MOFA and granting deemed conveyance. The petition by Kiran Builders was partly allowed — but only to the extent of correcting the area of land to be conveyed.

The order dated May 15, 2017 passed by the Competent Authority, along with the certificate of unilateral deemed conveyance issued in pursuance thereof, was set aside. The matter was remanded to the Competent Authority with a direction to issue a fresh certificate of unilateral deemed conveyance in respect of land admeasuring 16,584.55 sq. mtrs in favour of the three societies — within three months. Parties were directed to appear before the Competent Authority on June 24, 2026.

The occupancy certificates for the buildings of Respondent No. 1 Society were issued in the 1970s. Those of Respondent Nos. 2 and 3 followed in November 1990. The court noted that the builder had already delayed performance of its statutory obligation for an extraordinary length of time. No costs were awarded.

Also Read: Stuck With Deemed Conveyance? Maharashtra Govt Launches Statewide 4-Day Camp for Housing Societies

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The real estate industry has united in applauding the Supreme Court’s decision to uphold a Bombay High Court ruling from April 2019 that had invalidated three standards for determining the “capital value” of land where construction is yet to start under a new property tax regime. Both developer’s community and property owners see the SC ruling by the bench of Chief Justice U U Lalit and Justice Bela Trivedi as a considerable relief. Developers body like CREDAI-MCHI, which contested the constitutionality of the new system for calculating property taxes, experienced significantly higher property taxes due to the BMC’s new regulations.

The controversial Rule 20-22, taken down by the honorable Bombay High Court and Upheld by the Honorable Supreme Court of India, took into consideration the potential of construction on the vacant land for a valuation. And it took almost a decade, and a lengthy legal battle for many federations like the Central Mumbai Developers Welfare Association (CMDWA) to convince that under construction will have to be treated as vacant land in the new property tax regime. Property tax is among the biggest and “crucial” revenue sources for the BMC, especially since the abolition of the octroi. “The supreme court upheld no provision under the BMC Act to consider the development potential of vacant land for determining its capital value,” the supreme court upheld.

While congratulating CMDWA, Boman Irani, President, CREDAI-MCHI expressed, “We appreciate the tremendous efforts made by team CMDWA under the leadership of Shri Dharmesh Chheda for initiating the battle, which was very well supported by CREDAI-MCHI & NARDECO Maharashtra. “We are happy that the honourable supreme court upheld the decision of the Honourable Bombay High Court against a tax regime where under-construction property tax was higher than a constructed building. He further added that this would help rationalise the MMR property market price.

The SC reaffirmed that “only the existing physical qualities and state of the land and building can be considered for determining “capital value” and not the prospects of the land.” The BMC modified the property tax system in 2009 and switched the calculation method from “rateable value” to “capital value” of the land, a complicated formula utilising pre-1940 level-low standard rent. In 2019, the HC held that the amendment was valid but quashed three of its rules-20-22- as invalid. Rule 20 said ‘capital value’ would rely on the buildable potential of the land.

Speaking on the Supreme Court’s ruling, Dharmesh Chheda, President of the CMDWA, states that the MCGM had appealed the Bombay High Court’s decision, arguing that because the rules provided for a cap on property taxes, they wouldn’t rise as builders had anticipated. But on Monday, the Hon. Supreme Court dismissed the appeal, putting an end to the case.

Sandeep Runwal, President NAREDCO, expressed optimism about the development. “Any reduction in the tax amount will ultimately lead to a future property rate reduction. We are happy that the Hon. Supreme court has upheld the decision of Hon. Bombay High Court to stuck down the rule that taxed on the structure that has not been constructed yet and is only on paper,” he said.

Attorney General K. K. Venugopal and V. Sreedharan appeared as senior counsel for the BMC. At the same time, Shekhar Naphade, Milind Sathe, Darius Khambata, Chirag M. Shroff, and H. Devarajan testified before the SC on behalf of the respondents. They argued that land, where old buildings were dilapidated could only be taxed as “vacant land” and not based on a proposed mall or hotel.

Also Read: MAHA GOVT FORMS COMMITTEE TO STREAMLINE REAL ESTATE IN NAVI MUMBAI

The post DEVELOPERS WELCOMES SC DECISION TO UPHOLD BOMBAY HC VERDICT AGAINST MCGM RULES TAXING LAND UNDER CONSTRUCTION appeared first on Square Feat India.

By Varun Singh

In the year 2021-22, revenue from BMC Development Plan Department was estimated to ₹2000 crore which is revised to ₹14750 crore. Thus, there is a sizeable increase of ₹12750 crore.

As per Government of Maharashtra’s directives issued on January 14,.2021, the concession was given up to 50% in premium payable to Government and similarly this was also made applicable for the premium payable to BMC as per corporation resolution.

This has generated sizeable revenue income. This revenue will be mainly utilized for infrastructural development of city which will improve the quality life of citizens in Mumbai.

Boost to Real Estate Sector
The Government of Maharashtra was considerate to the ailing real estate sector as it affects the housing stock supply in the city.

The sector was under stress due to severe financial constraints and Covid only added to the woes. Considering various problems afflicting the sector the Government has introduced various concessions and incentives to the real estate sector.

These measures were adopted by BMC which gave a fillip to the sector and many projects which were in cold storage or about to be abandoned got a fresh lease of life.

The income to the BMC also increased from original forecast of ₹2000 crore to a revised estimate of ₹14750 crore. BMC has already received ₹13543 crore till January 2022 which is proof that the policy for helping the real estate sector has percolated down in the sector that would result in actual execution of real estate projects thus increasing the supply of housing stock as well as employment in the sector.

Also Read: BMC wants 20 acre land in Mumbai to build a 5,000 bed hospital

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By Varun Singh

The BMC commissioner presented the budget for Mumbai’s Municipal Corporation on Thursday. There were some big announcements too. Of which the biggest was about property tax.

Apart from this, the BMC has decided to take strict measures against those not paying the tax and for unauthorised construction.

The budget speech of the commissioner stated that, in the financial year 2021-22, revenue from Property Tax was revised from estimated ₹7000 crore to ₹4800 crore.

A major relief to residential property of 500 sq.ft. or less carpet area is one of the reason behind the shift in the goal of revenue from the property tax.

According to the BMC about 16,14,000 Mumbaikars got 100% relief from Property Tax payment. The amount of exemption to the Mumbaikars is to the extent of ₹462 crore per annum.

Reasons for reduction in estimation of income from Property Tax were answered as follows.

Besides, Capital Value Revision is deferred considering Covid-19 situation and without any rise in Property Tax is being collected on the basis of property tax for the year 2019-20.

According to BMC tax paying Mumbaikars are paying 50% of arrears tax as per court order as final decision is pending in the writ petition against Capital Value – Based Tax System.

The BMC claims that the drop in property tax collection is temporary and BMC expects property tax collection to come to normalcy in near future.

The BMC listed following measures to increase income from property tax

• Proposed Capital Value Revision as per section 154(1C) of MMC Act 1888, is to be implemented for 3 years starting from 2022-23.
• A provision for imposition of penalty on unauthorised construction which will be twice the amount of Property Tax is made under section 152A of MMC Act 1888, and implementation of revised procedure has already started.
• For timely collection of property tax, procedure to issue flat-wise bills to defaulting flat owners of HSG Societies is being implemented.

Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers said, “At a time when the Union Budget 2022-23 has not announced specific demand-side incentives, the Maharashtra government’s announcement on the property tax waiver in the affordable housing segment infuses a fresh lease of life for end users and prospective homebuyers. A booster to buoy the market sentiment, the likely revenue loss should be offset by incremental sales volumes in the affordable segment”

Also Read: Only 1 proposal offering land for pandemic hospital, BMC extends date

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By Varun Singh

There are many cases, where a builder oversells, at times they even sell flats for which they do not even have approvals.

A similar case knocked the doors of MahaRERA, where the authority held the builder being involved in a kind of unfair practice.

Rashiquah Ahmad approached MahaRERA against the developer Cordcon Builders Pvt Ltd.

Ahmad had booked an apartment in the building Indian Ocean located at Andheri, Mumbai.

The booking was carried out via a Letter of Allotment dated October 22, 2015 and Memorandum of Understanding (MoU) executed on October 27, 2015.

The homebuyer alleged that the builder illegally sold them an apartment on 17^th floor by making false representation that approval would be obtained.

Further, they stated that in spite of having paid 81% of the amount, the builder failed to  obtain approval and enter into an agreement for sale.

Homebuyer alleged that the developer has permission to construct only up to 15 floors as per the MCGM approvals and has not been able to acquire further approvals till date.

The buyer asked that the developer be directed to refund the amounts paid along with interest and payment of arrears of compensation towards rent at promised rate from November 2018 till the date of refund.

Builder submitted the he does not have the requisite approvals for the 17^th floor and has been paying compensatory rent to the homebuyer.

Developer was also willing to adhere to the MoU executed between the parties.  

The developer was willing to offer an alternate apartment to the homebuyer. But the counsel for the homebuyer stated that the alternate apartment offered was not to the liking of the homebuyer.

Counsel for the homebuyer also informed that by a letter dated February 1, 2019 the builder had given the option to the homebuyer to mutually end the transaction of sale of the apartment, in case the developer fails to provide possession of the apartment before the period ending December, 2019.

Gautam Chaterjee, Chairman, MahaRERA held that, the registered project is till up to 16 slabs of super structure and the homebuyer’s apartment is not part of the registered project.

Hence, strictly speaking,  the homebuyer is not an allottee in the registered project

Gautam Chaterjee, Chairman, MahaRERA

Chaterjee in his order dated September 30, 2020, noted, “though the Complainant’s apartment is not registered with MahaRERA, the act of the developer to take money from the Complainant for a proposed apartment and issue him an allotment letter, with an MoU in the registered project, amounts to the promoter being involved in a kind of “unfair practice” by promoting sale by adopting  unfair method like representing that the promoter has approval which he does not  have.”

Thus the builder was directed to refund the amounts paid by the homebuyer as per the terms agreed between the parties in the MoU and the builder’s email dated February 1, 2019.  

Also Read: Coworking Spaces In Residential Projects?

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By Varun Singh

The City of Mumbai urgently needs a Pandemic Hospital, and finally there could be some hope that it might be constructed soon.

On Tuesday, BMC opened the two Expression of Interest it had received. BMC is looking for 20-acre of land for the hospital.

A notice Inviting Expression of Interest (EOI) was issued by the land acquisition department of BMC on July 30, 2020, inviting land owners and developers.

The last date of submission for EOI was August 10, and the sealed offers/ EOIs (only Technical bids) were to be opened on August 14 at 4.00 p.m. in the office of Municipal Architect Worli Engineering Hub.

However, after BMC received only 1 proposal by August 10, the dates were extended to August 20, for EOI submissions, and finally it received two proposals.

On August 25, the offers were opened and the two interested parties for providing land for the Pandemic Hospital were found to be Swas Constructions and Rajaram Ovhal and family.

While Swas Constructions is offering land in Mulund, Rajaram Oval and Family has offered a land parcel in Bhandup.

So if all goes well the hospital may come up either in Mulund or Bhandup.

Bhaiyyasaheb Behere, Dy.Collector (LA) of MCGM, confirmed the two names and said, “These are EOI’s which will now be examined and if they are found eligible then the process will move ahead.”

Considering the large scale requirement of beds, during Corona pandemic, BMC made arrangements for 22,756 beds. Of which, 1,738 beds are ICCU, 11,250 beds are oxygenated O2 , 1,054 beds are ventilator beds.

But the need is for more beds and hence during a meeting with the Chief Minister and BMC commissioner, it was decided to establish a 5,000 bed hospital to cater to large scale of patients during pandemic.

The proposed 5,000 beded hospital may be located in the Suburban areas of Mumbai. The reason being that it can serve population of Mumbai as well as patients coming from Mumbai Metropolitan Region.

A committee constituted by Municipal Commissioner shall decide the compensation as may be payable to the land owner/developer.

After finalizing the land parcel, subjected land under reservations shall be acquired under Section 126 (1)(a) & (b) of Maharashtra Regional and Town Planning Act and remaining land shall be acquired by mutual consent through negotiation.

Also Read: BMC wants 20 acre land in Mumbai to build a 5,000 bed hospital

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