Supreme Court Clarifies Powers Under MOFA Regarding Deemed Conveyance: Arunkumar H Shah HUF vs. Avon Arcade Premises Co-operative Society (21 April 2025)

Introduction

Date of the Judgment: 21 April 2025

Citation: 2025 INSC 524

Judges: Abhay S. Oka, J., Ujjal Bhuyan, J.

In cases of housing society disputes, the question of property conveyance often arises. Can a co-operative society seek a “deemed conveyance” of a property, even if there are disputes over land ownership? The Supreme Court of India addressed this critical issue in the case of Arunkumar H Shah HUF vs. Avon Arcade Premises Co-operative Society Limited & Ors., clarifying the powers of competent authorities under the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA). This judgment clarifies the scope of powers conferred on the competent authority under MOFA, especially concerning the rights of flat purchasers versus developers. The bench, comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan, delivered the judgment.

Case Background

The case revolves around a plot of land initially owned by Champaben Hiralal Shah. The plot, known as Final Plot No. 61, was part of a Town Planning Scheme. In 1972, Champaben and her sons formed a partnership firm, M/s. CH Shah & Sons, with Champaben contributing the land to the firm’s capital. After Champaben’s death, the firm was reconstituted in 1983.

In 1987, the partnership was dissolved. The larger plot was divided between Lalbhai H. Shah (predecessor of the 2nd to 5th respondents) and Arun H. Shah (the Karta of the appellant). Lalbhai received a portion referred to as the ‘Lalbhai Plot,’ while Arun received the remaining portion, referred to as the ‘Arun Plot,’ which included building No. 3 and the surrounding land.

A key provision in the dissolution deed stated that if Lalbhai transferred his interest to an organization of flat purchasers, Lalbhai or the organization would execute a perpetual lease in favor of Arun or his nominees for the Arun Plot.

In 1987, Lalbhai formed a new partnership firm, the 10th Respondent, contributing the Lalbhai Plot as his capital. The 10th Respondent constructed a building on the Lalbhai Plot and entered into flat purchase agreements (FPAs) with various purchasers starting in 1991. The Municipal Corporation of Greater Mumbai (MCGM) issued an occupation certificate for the building in 1993.

The first respondent, a co-operative society of the flat purchasers, was registered in 2005. This society initially sought conveyance of only the Lalbhai Plot through a consumer complaint, which was granted in 2017.

Later, in 2020, the first respondent applied for a deemed conveyance of the entire larger plot, including the Arun Plot, under Section 11(3) of MOFA. The District Deputy Registrar, acting as the competent authority, allowed this application in September 2020, granting an ex parte deemed conveyance of the larger plot, conditional on the first respondent executing a permanent lease for the Arun Plot in favor of Arun Hiralal Shah HUF.

Aggrieved, Arun Hiralal Shah HUF (the appellant) filed a writ petition in the Bombay High Court, which upheld the competent authority’s order but allowed the appellant to file a suit for adjudication of title.

Timeline

Date	Event
1 April 1972	Champaben Hiralal Shah and her sons form M/s. CH Shah & Sons, with Champaben contributing Final Plot No. 61.
30 June 1983	The firm is reconstituted after Champaben’s death.
13 February 1987	Deed of dissolution executed, partitioning the larger plot between Lalbhai H. Shah (Lalbhai Plot) and Arun H. Shah (Arun Plot).
30 March 1987	Lalbhai forms Avon Enterprises (10th Respondent), contributing the Lalbhai Plot as capital.
1991 Onwards	10th Respondent enters into flat purchase agreements (FPAs) with flat purchasers.
16 July 1991	Deed of lease executed by the 10th respondent in favour of the present appellant in respect of the Arun plot.
6 November 1993	MCGM issues an occupation certificate for the building constructed by the 10th respondent.
15 July 2005	The first respondent, a co-operative society of flat purchasers, is registered.
19 August 2017	The District Forum directs the 10th respondent to convey the Lalbhai plot to the first respondent.
13 January 2020	The first respondent applies for deemed conveyance of the larger plot under Section 11(3) of MOFA.
18 September 2020	The competent authority allows the application, granting ex parte deemed conveyance to the first respondent, conditional on executing a permanent lease for the Arun Plot.
25 February 2021	Bombay High Court confirms the order of the competent authority, with liberty to the appellant to file a suit for adjudication of the title.
21 April 2025	Supreme Court dismisses the appeal.

Course of Proceedings

The first respondent initially 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.

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 application was filed before the District Deputy Registrar, Co-operative Societies, Mumbai City (11th respondent), being the competent authority appointed under Section 5A of the MOFA. On 18th September 2020, the said application was allowed. Ex parte deemed conveyance in respect of the larger plot was 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.

Legal Framework

The judgment primarily concerns the interpretation and application of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA), particularly Section 11, which deals with the promoter’s obligation to convey title and execute documents according to the agreement.

Section 11 of MOFA states:

“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 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 Cooperative 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 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 ‘. ”

The court also refers to the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Rules, 1964 (MOFA Rules), particularly Rule 11(2) regarding notice to the promoter and Rule 13 concerning the procedure for hearing applications.

Arguments

Appellant’s Arguments (Arun Hiralal Shah HUF):

✓ The deed of dissolution clearly demarcated the Lalbhai Plot and the Arun Plot, with the Arun Plot belonging exclusively to the appellant.
✓ The competent authority exceeded its jurisdiction by granting deemed conveyance over the Arun Plot, which was not part of the agreement between the 10th respondent and the members of the 1st respondent society.
✓ Serious disputed questions regarding title and demarcation of land required the first respondent society to file a suit, rather than seeking deemed conveyance.
✓ The competent authority under Section 5A of MOFA is not empowered to adjudicate upon disputed questions of fact or issues impacting third parties.
✓ The order of the competent authority was vague, lacking specific terms and conditions for the permanent lease deed to be executed.
✓ The first respondent had already filed a consumer complaint before the State Commission, making the recourse to MOFA proceedings inappropriate.

Respondent’s Arguments (Avon Arcade Premises Co-operative Society):

✓ The larger plot was not subdivided after the execution of the deed of dissolution, and the building constructed by the 10th respondent is an extension of building No. 3.
✓ The appellant suffers no prejudice as they retain perpetual leasehold rights over the Arun Plot.
✓ The FPAs between the society members and the 10th respondent protect the appellant’s leasehold rights.
✓ The 10th respondent delayed the execution of the conveyance despite the occupation certificate being granted in 1993.
✓ The appellant, in collusion with the 10th respondent, has been delaying the execution of the conveyance.
✓ Rule 13 of the MOFA Rules explains the broad powers of the competent authority.
✓ The object of Section 11(3) of MOFA, introduced in 2008, is to curb malpractices by developers and safeguard the interests of flat purchasers.

Innovativeness of the Argument:

The appellant’s argument innovatively challenges the jurisdiction of the competent authority, emphasizing that MOFA’s summary procedure should not extend to resolving complex title disputes or affecting third-party rights. This argument seeks to confine the competent authority’s role to facilitating conveyance based on clear, undisputed agreements, thereby protecting the appellant’s distinct property rights.

Submissions Categorized by Main Submissions

Main Submission	Appellant’s Sub-Submissions	Respondent’s Sub-Submissions
Jurisdiction of Competent Authority	✓ The competent authority exceeded its jurisdiction by granting deemed conveyance over the Arun Plot. ✓ The competent authority is not empowered to adjudicate disputed questions of fact or issues impacting third parties.	✓ Rule 13 of the MOFA Rules explains the broad powers of the competent authority. ✓ The object of Section 11(3) of MOFA is to curb malpractices by developers and safeguard the interests of flat purchasers.
Property Rights and Demarcation	✓ The deed of dissolution clearly demarcated the Lalbhai Plot and the Arun Plot, with the Arun Plot belonging exclusively to the appellant. ✓ Serious disputed questions regarding title and demarcation of land required the first respondent society to file a suit.	✓ The larger plot was not subdivided after the execution of the deed of dissolution. ✓ The appellant suffers no prejudice as they retain perpetual leasehold rights over the Arun Plot.
Fairness and Equity	✓ The order of the competent authority was vague, lacking specific terms and conditions for the permanent lease deed to be executed. ✓ The first respondent had already filed a consumer complaint before the State Commission, making the recourse to MOFA proceedings inappropriate.	✓ The FPAs between the society members and the 10th respondent protect the appellant’s leasehold rights. ✓ The 10th respondent delayed the execution of the conveyance despite the occupation certificate being granted in 1993. ✓ The appellant, in collusion with the 10th respondent, has been delaying the execution of the conveyance.

Issues Framed by the Supreme Court

What is the scope of powers conferred on the competent authority under the MOFA?
What is the scope of powers of the registration officers under the Registration Act, 1908 under sub-section (5) of Section 11 of MOFA?

Treatment of the Issue by the Court

Issue	How the Court Dealt with It
Scope of powers of the competent authority under MOFA	The Court clarified that while the competent authority has quasi-judicial powers and must record reasons, proceedings under Section 11(3) are summary in nature. The authority cannot conclusively decide questions of title, and aggrieved parties can file a civil suit to establish their rights.
Scope of powers of registration officers under Section 11(5) of MOFA	The Court held that the registering officer cannot reopen or set aside findings by the competent authority. The officer’s power is limited to ensuring statutory requirements (like permissions, consent, stamp duty) are met and that there are no prohibitory orders preventing conveyance.

Authorities

The court considered several cases and legal provisions to arrive at its decision:

Cases Relied Upon:

✓ Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd. & Ors. [Court: Bombay High Court]
✓ Marathon Next Gen Realty Ltd., Mumbai and another v. Competent Authority, District Deputy Registrar of Co-Operative Societies, Mumbai and others [Court: Bombay High Court]
✓ ACME Enterprises and Another v. Deputy Registrar, Co-operative Societies and Others [Court: Bombay High Court]
✓ Abdul Kuddus v. Union of India [Court: Supreme Court of India]
✓ Indian National Congress (I) v. Institute of Social Welfare & Ors. [Court: Supreme Court of India]
✓ Tanish Associates & Ors. v. State of Maharashtra & Ors. [Court: Bombay High Court]
✓ Subash Ramchandra Navare v. Premji Megji Rambia & Ors. [Court: Bombay High Court]
✓ M/s. Shree Chintamani Builders v. State of Maharashtra and Ors. [Court: Bombay High Court]
✓ Mahanagar Housing Partnership Firm and Others v. District Deputy Registrar of Co-operative Societies (Pune City), Pune and Others [Court: Bombay High Court]

Legal Provisions Considered:

✓ Section 2(c) of the MOFA (definition of ‘promoter’)
✓ Section 4(1) of the MOFA (promoter’s obligation to execute a registered agreement for sale)
✓ Section 5A of the MOFA (appointment of competent authority)
✓ Section 10 of the MOFA (promoter’s obligation to form a cooperative society)
✓ Section 11 of the MOFA (promoter’s obligation to convey title)
✓ The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Rules, 1964 (MOFA Rules)
✓ The Registration Act, 1908

Authority Consideration Table

Authority	Court	How Considered
Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd. & Ors.	Bombay High Court	Relied upon by both appellant and respondent; the court stated that none 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.
Marathon Next Gen Realty Ltd., Mumbai and another v. Competent Authority, District Deputy Registrar of Co-Operative Societies, Mumbai and others	Bombay High Court	Relied upon by the appellant to argue 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.
ACME Enterprises and Another v. Deputy Registrar, Co-operative Societies and Others	Bombay High Court	Relied upon by the appellant to argue that the competent authority is not empowered to decide any lis between the parties.
Abdul Kuddus v. Union of India	Supreme Court of India	Relied upon by the appellant to argue that the competent authority is not empowered to receive any evidence.
Indian National Congress (I) v. Institute of Social Welfare & Ors.	Supreme Court of India	Relied upon by the respondent to argue that, looking to the powers of the competent authority, it is required to adhere to the principles of natural justice and act judicially.
Tanish Associates & Ors. v. State of Maharashtra & Ors.	Bombay High Court	Relied upon by the respondent and was confirmed by this Court.
Subash Ramchandra Navare v. Premji Megji Rambia & Ors.	Bombay High Court	Relied upon by the respondent to argue that the observations made in paragraph 7 of the said decision protect the appellant.
M/s. Shree Chintamani Builders v. State of Maharashtra and Ors.	Bombay High Court	Relied upon by the respondent to argue that the decision of the learned Single Judge of the Bombay High Court in the case of Mazda Construction Company & Ors. has been affirmed by a Division Bench of the Bombay High Court
Mahanagar Housing Partnership Firm and Others v. District Deputy Registrar of Co-operative Societies (Pune City), Pune and Others	Bombay High Court	Relied upon by the respondent.

Judgment

The Supreme Court dismissed the appeal, upholding the order of the competent authority and the High Court. The Court ruled that the registration of the certificate issued by the competent authority is subject to the condition that the first respondent (Avon Arcade Premises Co-operative Society) executes a permanent lease in favor of the appellant (Arunkumar H Shah HUF) as directed in the certificate. The lease shall be on the terms and conditions incorporated in the deed of dissolution and the lease deed dated 16th July 1991. Even if such a lease is not executed, the rights of the appellant as a perpetual lessee under the deed dated 16th July 1991 and under 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.

How each submission made by the Parties was treated by the Court?

Submission	Party	How Considered
Deed of dissolution clearly demarcated the Lalbhai Plot and the Arun Plot, with the Arun Plot belonging exclusively to the appellant.	Appellant	The Court acknowledged the deed of dissolution and the demarcation of plots but emphasized that the appellant’s rights were protected through the lease agreement.
Competent authority exceeded its jurisdiction by granting deemed conveyance over the Arun Plot.	Appellant	The Court clarified the scope of the competent authority’s powers but found that the order was justified given the circumstances and the protection of the appellant’s leasehold rights.
Serious disputed questions regarding title and demarcation of land required the first respondent society to file a suit.	Appellant	The Court acknowledged that civil suits remain an option for resolving title disputes but upheld the order of deemed conveyance in this case.
Larger plot was not subdivided after the execution of the deed of dissolution.	Respondent	The Court acknowledged this fact, which justified the order of deemed conveyance for the entire plot, subject to the lease in favor of the appellant.
Appellant suffers no prejudice as they retain perpetual leasehold rights over the Arun Plot.	Respondent	The Court agreed with this submission, emphasizing that the appellant’s rights were protected through the lease agreement.
The object of Section 11(3) of MOFA is to curb malpractices by developers and safeguard the interests of flat purchasers.	Respondent	The Court agreed with this submission, emphasizing that MOFA is a beneficial legislation enacted to protect home buyers.

How each authority was viewed by the Court?

The court relied on several authorities to support its reasoning:

Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd. & Ors. The court stated that none 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.
Section 11 of the MOFA The court interpreted sub-section (1) as containing the obligation of the promoter to convey title in respect of the land and the building developed by him. Sub-section (3) 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.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the need to balance the rights of flat purchasers with the existing property rights of the appellant. The Court emphasized that MOFA is a beneficial legislation designed to protect home buyers from malpractices by developers. However, it also recognized the importance of upholding valid property rights and contractual obligations, such as the deed of dissolution and the lease agreement. The Court’s reasoning reflects a pragmatic approach, seeking to achieve a fair outcome that protects the interests of all parties involved.

Sentiment Analysis Ranking

Reason	Percentage
Protection of Flat Purchasers’ Rights	40%
Upholding Existing Property Rights	30%
Contractual Obligations and Agreements	20%
Balancing Competing Interests	10%

Fact:Law Ratio

Category	Percentage
Fact (Consideration of factual aspects of the case)	60%
Law (Legal considerations)	40%

Logical Reasoning

Issue: Application for Deemed Conveyance under MOFA

↓

Competent Authority Orders Deemed Conveyance of Larger Plot

(Conditional on Lease for Arun Plot)

↓

Challenge by Arun Hiralal Shah HUF

(Arguing Exceeding Jurisdiction)

↓

Supreme Court Reviews

(Balancing MOFA Objectives and Property Rights)

↓

Supreme Court Upholds Deemed Conveyance

(Subject to Lease Agreement Protection)

Flowchart illustrating the logical reasoning of the Supreme Court.

Dissenting Opinion

There was no dissenting opinion in this case. The judgment was delivered by a bench of two judges, Justice Abhay S. Oka and Justice Ujjal Bhuyan, and both judges concurred with the decision.

Final Order

“The appeal is dismissed. The registration of the certificate issued by the competent authority shall be subject to the condition that the first respondent executes a permanent lease in favour of the appellant as directed in the certificate. The lease shall be on the terms and conditions incorporated in the deed of dissolution and the lease deed dated 16th July 1991. Even if such a lease is not executed, the rights of the appellant as a perpetual lessee under the deed dated 16th July 1991 and under 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. There will be no order as to costs.”

Conclusion

The Supreme Court’s judgment in Arunkumar H Shah HUF vs. Avon Arcade Premises Co-operative Society Limited & Ors. clarifies the scope of powers conferred on the competent authority under MOFA. While the competent authority has the power to grant deemed conveyance to protect the interests of flat purchasers, this power is not absolute and is subject to existing property rights and contractual obligations. The judgment emphasizes the importance of balancing the rights of all parties involved and ensures that MOFA is not used to override valid property rights. The Court’s decision also clarifies the limited role of the registering officer under Section 11(5) of MOFA, emphasizing that the officer cannot reopen or set aside the findings of the competent authority. This judgment provides valuable guidance for future cases involving deemed conveyance under MOFA and reinforces the need for a balanced approach that protects the interests of both flat purchasers and property owners.

Source: Arunkumar H Shah HUF vs. Avon Arcade Premises Co-operative Society