The Case

The Upvan Woodlands CHS in Upper Govind Nagar, Malad East, was constructed on a portion of a larger five-plot layout admeasuring 4683.80 sq. mtrs. originally owned by Balrampur Chini Mills and later developed by Upvan Developers. The society’s building received its Occupation Certificate in May 2017, and the society was registered in July 2018. Despite repeated demands, the developer refused to execute conveyance, insisting — as per Clause 12 of the MOFA Agreement for Sale — that conveyance would be done only after completion of the entire layout development and sale of all flats in future buildings.

The Competent Authority (District Deputy Registrar, Co-operative Societies) rejected the society’s application for deemed conveyance on 20 May 2025, terming it premature and relying heavily on the contractual clause and the Marathon Era judgment.

Key Legal Findings of the Court

1. Statutory Timeline Overrides Contractual Clauses The Court emphatically held that the timeline prescribed under Rule 9 of the Maharashtra Ownership Flats Rules, 1964 (conveyance within 4 months of society registration, or a mutually agreed fixed period) prevails over any contractual stipulation. Any clause that defers conveyance until an uncertain future event — such as completion of the entire layout — is void to that extent. The Court relied heavily on its earlier judgment in Lok Housing and Construction Ltd. vs. State of Maharashtra (2025).
2. Proportionate / Part Conveyance Allowed in Layouts This is the most important takeaway for societies in large phased developments. The Court ruled that societies of completed buildings are entitled to conveyance of their proportionate share of land even before the entire layout is developed. This principle is backed by the Government Resolution dated 22 June 2018 issued by the Cooperation Department.
3. Misreading of Precedents Clarified The Court clarified that the Marathon Era judgment was wrongly interpreted by the Competent Authority. It does not support the developer’s stand of waiting for full layout completion. The Court also distinguished the Apex Court’s observations in Jayantilal Investments.
4. FSI and Developer Concerns Addressed While acknowledging that FSI calculations are done on the entire layout, the Court noted that the society had restricted its claim to only 2799.90 sq. mtrs. (as mentioned in the Second Schedule of the agreements). Granting conveyance of this portion will not prevent the developer from completing construction on the remaining plots (148 & 149). The society will have no right to interfere with the balance development beyond the originally disclosed terms.

Significance for Homebuyers and Housing Societies

This judgment is a major boost for homebuyers trapped in large layout projects where developers deliberately delay conveyance to exploit additional FSI/TDR that becomes available over time. By securing ownership of their proportionate land early, societies gain:

• Marketable title and better property valuation
• Ability to undertake redevelopment independently if needed
• Stronger legal position against promoter delays

The ruling reinforces the welfare objective of the Maharashtra Ownership Flats Act (MOFA) and sends a clear message that private contractual clauses cannot defeat statutory protections for flat purchasers.

What Happens Next?

The Competent Authority must now issue the deemed conveyance certificate within six weeks. The developer’s request for stay on the order was rejected by the Court.

Legal experts believe this judgment, along with earlier rulings like ACME Enterprises and Lok Housing, will strengthen the hands of Competent Authorities while deciding similar applications. Societies stuck in similar situations should immediately review their agreements and file (or revive) applications for deemed conveyance.

Also Read: Conveyance Deed has to be registered within 3 months of Receiving OC

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