Pran Ashish Co-Operative Housing Society Limited vs District Deputy Registrar Co-Operative Societies Mumbai City (3) And Competent Authority

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 32903 OF 2025

Pran Ashish Cooperative Housing Society
Limited, Through the Treasurer of Representative
of Pran Ashish CHSL
A cooperative housing society duly registered
under the provisions of the Maharashtra
Cooperative Societies Act, 1960, having its
registered office at Pranashish Building – A,
Versova Beach Road, Versova, Andheri (West),
Mumbai – 400 061. ...Petitioner
Versus
1. District Deputy Registrar, Cooperative
Societies, Mumbai City (3) and Competent
Authority,
Having its office at MHADA Building,
Ground Floor, Room No. 69,
Bandra (East), Mumbai 400 051.
2. Tarun Shah
Adult Indian Inhabitant,
Age: unknown, occupation unknown,
residing at Pran Ashish – B, 37,
Versova Beach Road, Versova,
Andheri (West), Mumbai – 400 061.
3. Dipika Shah
Adult Indian Inhabitant,
Age: unknown, Occupation unknown,
residing at Pran Ashish – B, 37,
Versova Beach Road, Versova,
Andheri (West), Mumbai – 400 061.
ARUN
RAMCHANDRA
SANKPAL
Digitally signed
by ARUN
RAMCHANDRA
SANKPAL
Date: 2026.07.14
20:57:02 +0530
4. Apurva Shah
Adult Indian Inhabitant,
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Age: unknown, Occupation unknown,
residing at Pran Ashish – B, 37,
Versova Beach Road, Versova,
Andheri (West), Mumbai – 400 061.
5. Dhara Mehul Desai,
Adult Indian Inhabitant,
Age: unknown, occupation unknown,
residing at Pran Ashish – B, 37,
Versova Beach Road, Versova,
Andheri (West), Mumbai – 400 061.
6. Nayana Himanshu Shah
Adult Indian Inhabitant,
Age: unknown, occupation unknown,
residing at Pran Ashish – B, 37,
Versova Beach Road, Versova,
Andheri (West), Mumbai – 400 061.
7. Nihar Himanshu Shah
Adult Indian Inhabitant,
Age: unknown, occupation unknown,
residing at Pran Ashish – B, 37, Versova Beach
Road, Versova, Andheri (West),
Mumbai – 400 061.
8. Shivali Himanshu Shah,
Adult Indian Inhabitant, Age: Unknown,
occupation unknown, residing at
Pran Ashish – B, 37, Versova Breach Road,
Versova, Andheri (West),
Mumbai – 400 061.
9. The State of Maharashtra,
Through Government Pleader,
…Respondents
Bombay High Court, Original Side,
Mr. Aspi Chinoy, Senior Advocate, with Mr. Simil Purohit, Senior
Advocate, Mr.Vishal Pattabiraman, Mr Rutwij Bapat, Ms. Nikita
Vardhan and Ms. Nidhi Pathak, i/b Kanga & Co, for the
Petitioner.
Mr. Manish Upadhye, AGP, for Respondent No1-State.
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Mr. Vineet Naik, Senior Advocate, with Mr. Somnath Anchan, Mr.
Suraj Iyer and Mr. Atharva Utekar, i/b Ganesh and Co, for
Respondent No.2.
Mr. Mayur Khandeparkar, with Aniesh Jadhav, i/b TRD Associates, for
Respondent Nos. 3 to 8.
CORAM : N. J. JAMADAR, J.
st
RESERVED ON : 1 JULY 2026
th
PRONOUNCED ON : 14 JULY 2026
JUDGMENT:
1.
Rule. Rule made returnable forthwith, and, with the consent of
the learned Counsel for the parties, heard finally.
2.
By this Petition, the Petitioner takes exception to an order dated
th
18 April 2025 passed by the District Deputy Registrar Cooperative
Societies-the Competent Authority under Section 5A of the Maharashtra
Ownership Flats (Regulation of the Promotion of Construction, Sale,
Management and Transfer) Act, 1963 (“MOFA 1963”), whereby the
Competent Authority (R1) directed the Petitioner to execute and
register a Lease Deed in favour of Respondent Nos. 2 to 8 in terms of
th
the order dated 19 May 2015 passed by the Competent Authority,
th
failing which the said order dated 19 May 2015, granting deemed
conveyance, and all the acts undertaken pursuant thereto, shall stand
determined.
3.
Shorn of unnecessary details, background facts leading to his
Petition can be stated as under:
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3.1 Balgauri Chimanlal Shah was the original owner of the property
bearing CTS No. 1069, admeasuring 2441.10 sq mtrs situated at 37
Versova Beach Road, Versova, Mumbai, along with a bungalow standing
thereon known as “Pran Ashish Bungalow” (the larger premises).
3.2 The owner granted development rights in respect of the larger
premises to M/s Ajit Chimanlal Shah and others, the developer, under a
st
Development Agreement dated 1 May 1985. The developer constructed
a building known as Pran Ashish Building-B consisting of stilt plus two
upper floors comprising of four flats, totally admeasuring 2834.50 sq ft
built up area, on a portion of the larger premises, admeasuring 617.22
sq mtrs (“the smaller premises”) and a building known as Pran Ashish-A
comprising of ground plus seven upper floors, on the balance portion of
the larger premises, admeasuring 1833.31 sq mtrs (“the society
premises”).
3.3 The Development Agreement, contained a covenant that, the
smaller premises and the Building-B constructed thereon shall be in
exclusive use, occupation and possession of the four tenants of original
owner, namely, (i) Ajit, (ii) Satish, (iii) Mahesh and (iv) Himanshu
Chimanlal Shah, (the predecessor-in-tile of Respondent Nos. 2 to 8),
they will become the owners of the smaller premises and the building
constructed thereon, and the said four persons and their families
shall have exclusive right to fetch water from the well, which
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was situated on the Southern side of boundary wall of the the smaller
premises, and the flat purchasers in the new building, i.e., Pran Ashish
Building-A shall have no right, title and interest in the smaller premises
and the Building- B standing thereon.
3.4 The Development Agreement further provided that at the time of
the execution of conveyance of the society premises in favour of the
developers and/or their nominees, including a cooperative society, such
purchasers of the society premises shall execute a perpetual lease at the
lease rent of Rs.1/- per year, in favour of the said four persons, in
respect of the smaller premises and Building-B constructed thereon
3.5 Pursuant to the terms of the Agreement, the developers
constructed the buildings ‘A’ and ‘B’ and executed Agreements with
various flat purchasers in Pran Ashish Building-A.
rd
3.6 On 3 March 2000, the flat purchasers of Pran Ashish-A formed
the Petitioner-society, under the provisions of the Maharashtra
Cooperative Societies Act, 1960. As the title was not conveyed in favour
of the society, the Petitioner-society filed an Application for grant of
Certificate for Unilateral Deemed Conveyance (UDC), being Application
No. 166 of 2014, before the Competent Authority.
th
3.7 By an order dated 19 May 2015, the Competent Authority
granted a certificate of UDC in favour of the Petitioner-society subject to
the condition of grant of a perpetual lease in respect of the smaller
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premises at the lease rent of Rs.1/- per month, in accordance with the
th
terms of the Development Agreement. Pursuant thereto on 12 April
2016 a deemed Conveyance came to be executed in favour of the
Petitioner-society.
3.8 The Petitioner asserts that, despite repeated communications,
Respondent Nos. 2 to 8 failed or neglected to come forward to execute
the Lease Deed. Respondent Nos. 2 to 8 insisted that the Lease Deed
shall contain a provision that Respondent Nos. 2 to 8 were entitled to
redevelop the two storied building, Pran Ashish-B, situated on the
seaward portion of the subject premises by constructing a high rise
building thereon. The Petitioner declined to execute such lease. It is
contended that, having regard to the context of the Development
Agreement whereunder Pran Ashish-B was constructed on the seaward
side and Pran Ashish-A on the landward side, it was never contemplated
that Respondent Nos. 2 to 8 would redevelop a high rise building and
thereby block the view of the Pran Ashish- A's occupants.
3.9 Thus the Petitioner claimed to have terminated the tenancy of
Respondent Nos. 2 to 8 and instituted an ejectment suit, being T.E. Suit
No. 62 of 2024, against Respondent Nos. 2 to 8. To give a counter blast,
the Petitioner asserts, after nine years of the order of deemed
conveyance, Respondent No.2 filed an application before the Competent
Authority (R1) in the disposed of Deemed Conveyance Application No.
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166 of 2014, seeking execution of a unilateral deemed lease deed of
the smaller premises along with the building, Pran Ashish-B, in favour
of Respondent Nos. 2 to 8, in accordance with the draft Lease Deed. The
Petitioner raised various objections to the said application, including
the jurisdiction of the Competent Authority to entertain such an
Application in a disposed of proceeding.
3.10 After appraisal of the material on record, by the impugned order
th
dated 18 August 2025, the Competent Authority was persuaded to
allow the Application and direct the Petitioner to execute and register
the Lease Deed in terms of paragraph F(i) to (iii) of the Draft Lease
Deed in favour of Respondent Nos. 2 to 8, failing which the order dated
th
19 May 2015, granting UDC in favour of the Petitioner and all the
consequential actions pursuant thereto, shall stand determined.
4.
Being aggrieved, the Petitioner-society has invoked the writ
jurisdiction.
SUBMISSIONS:
5.
I have heard, Mr. Aspi Chinoy, the learned Senior Advocate for
the Petitioner, Mr. Manish Upadhye, the learned AGP for Respondent
No.1-State, Mr. Vineet Naik, the learned Senior Advocate for
Respondent No.2, and Mr. Mayur Khandeparkar, the learned Counsel for
Respondent Nos. 3 to 8, at some length. The learned Counsel took the
Court through the pleadings, documents and material on record.
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6.
Mr. Aspi Chinoy, the learned Senior Advocate for the Petitioner,
submitted that the impugned order suffers from grave jurisdictional error.
Once the Competent Authority has passed a final order, it became functus
officio. The Competent Authority had no power to pass any further order
much less terminate or cancel an earlier order of deemed conveyance.
The Competent Authority's powers are confined by the provisions
contained in Section 11(4) of the MOFA 1963, and it can only issue a
Certificate for unilateral execution of Conveyance Deed conveying the
right, title and interest of the Promoter in the land and building in favour
of the society as deemed conveyance. The Competent Authority cannot
decide the rights of the parties as a Civil Court in exercise of its plenary
jurisdiction would adjudicate.
7.
Mr. Chinoy further submitted that, the Petitioner is not averse
to execution of the Lease Deed in favour of Respondent Nos. 2 to 8,
in accordance with the terms of the Development Agreement. However,
the context in which the Development Agreement came to be
executed cannot be lost sight of. Since the tenants of original owner
were to occupy the seaward small portion of the larger premises,
the parties had agreed that only a two storied structure would be built
on the said smaller premises. Respondent Nos. 2 to 8 thus
cannot be permitted to have unrestricted development of the
smaller premises and erect a high rise building and thereby
completely block the sea view of the apartment owners in Pran
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Ashish Building-A. What should be the terms of the Lease Deed to be
executed by the Petitioner in favour of Respondent Nos. 2 to 8, and
whether the Petitioner is entitled to restrain the holders of smaller
premises from carrying out unrestricted development, are the matters
which properly fall within the jurisdiction of the Civil Court. The
Competent Authority thus committed a grave error in law in directing
the Petitioner to execute the Lease Deed in favour of Respondent Nos. 2
to 8 as if it was a Civil Court.
8.
As a second limb of the submission, Mr. Chinoy would urge,
under no circumstances, the Competent Authority could have directed
that in the event of the failure of the Petitioner to execute the Lease
Deed, as indicated in the impugned order, the first order of granting
th
UDC dated 19 May 2015 and the consequent actions, including the
registered conveyance in favour of the Petitioner-society, would stand
determined.
9.
Mr. Vineet Naik, the learned Senior Advocate for Respondent No.
2, countered the submissions on behalf of the Petitioner, with equal
tenacity. Mr. Naik submitted that, first and foremost, the Petitioner-
society having obtained the Certificate of UDC which was made
conditional upon execution of the perpetual lease in favour of
Respondent Nos. 2 to 8, got the deemed conveyance executed in its
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favour and derived benefit under the said order, cannot be permitted to
approbate and reprobate.
10.
Amplifying the aforesaid submission, Mr. Naik would urge that,
there is no dispute about the execution of Development Agreement
st
dated 1 May 1985 and the terms thereof. Nor is it in dispute that the
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order of deemed conveyance dated 19 May 2015 was clearly and
specifically made subject to the execution of the perpetual lease in
favour of the holders of the smaller premises. The jural relationship
between the Petitioner and Respondent Nos. 2 to 8 is also incontestable.
Yet, Mr. Naik would urge, the Petitioner after having obtained all the
benefits under the instrument and the order granting deemed
conveyance, not only mala fide terminated the lease but also instituted
a suit for eviction before the Court of Small Causes. This conduct of the
Petitioner must enter into the judicial determination, submitted Mr.
Naik.
11.
Refuting the submissions on behalf of the Petitioner that the
Competent Authority has transgressed the jurisdictional limits in
ordering the execution of the Lease Deed in favour of Respondent Nos.
2 to 8, Mr Naik submitted that the impugned order, if properly
construed, is in the nature of an enforcement order. The Competent
Authority has not determined the rights and obligations of the parties
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afresh but has issued directions to enforce the order dated 19 May
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2015. Taking the Court through the clauses of draft Lease Deed (Exhibit
“G”) in terms of which the Petitioner has been directed to execute the
Lease Deed, Mr Naik submitted that the directions are in consonance
with the contractual and statutory obligations of the parties, which the
Competent Authority has the competence to enforce.
12.
Mr. Mayur Khandeparkar, the learned Counsel for Respondent
Nos. 3 to 8, supplemented the submissions of Mr. Naik. Mr.
Khandeparkar would urge that if the justice of the case is considered,
then no fault can be found with the impugned order. In the light of the
undisputed contractual obligations and the order of deemed conveyance
th
dated 19 May 2015, which was never called in question by the
Petitioner, if the impugned order is interfered with, it would result in
miscarriage of justice. Thus, this Court in exercise of its supervisory
jurisdiction may not interfere with the impugned order as it promotes
justice, submitted Mr. Khandeparkar.
13.
The aforesaid rival submissions now fall for consideration.
CONSIDERATIONS:
14.
To begin with the nature of the power exercised by the
Competent Authority under MOFA 1963. Under Section 4 of the MOFA
1963 an obligation is cast on the promoter to enter into a written
agreement for sale with each of the persons who are to take the flats in
the building to be constructed by the promoter, in the prescribed
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format. Section 10 enjoins the promoter to take steps for registration of
the organization of the persons who take flats as a cooperative society,
or as the case may be, as a company. Section 11 mandates that the
promoter shall take all necessary steps to complete his title and convey
to such organization his right, title and interest in the land and the
building, and execute all relevant documents therefor in accordance
with the agreement executed under Section 4. Under sub-section (4) of
Section 11, the Competent Authority after making such enquiry as it
deems necessary and after verifying authenticity of the documents
submitted and after giving the promoter a reasonable opportunity of
being heard, if satisfied that it is a fit case for issue of such certificate,
shall issue a certificate to the Registrar of Assurances certifying that it is
a fit case for enforcing unilateral execution of conveyance conveying
thereby right, title and interest of the promoter in the land and building
infavour of such organization, as deemed conveyance.
15.
Thus what has to be conveyed by way of deemed conveyance is
promoters right, title and interest in the land and building. The use of
the expression, “ his right, title and interest”, emphasises the nature of
the obligation of the promoter to convey to the organization of
purchasers what, in fact, belongs to the promoter. The Competent
Authority is thus entrusted with the responsibility to enforce the
obligation of the promoter. In a sense, it is only the agency which
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executes the conveyance, in favour of the organization of purchasers, to
which they are ultimately entitled to, stands substituted as the promoter
either fails, refuses or disables himself from discharging the said
obligation.
16.
In the case of ACME Enterprises and Anr Vs Deputy Registrar,
1
Cooperative Societies & Ors. this Court, after adverting to a large body
of precedents, summarised the legal position as under:
“30. From the above statutory provisions and enunciation, the
position which emerges can be summarized as under. The
authority to grant deemed conveyance is conditioned and
controlled by the primary obligation of the promoter to convey
to the organization of flat purchasers right, title and interest in
the land and buildings, in accordance with the agreement
executed under Section 4. Competent authority cannot convey
more than what the promoter had agreed to convey under the
agreement executed under Section 4. What competent
authority is thus required to consider is, the extent of the
obligation incurred by the promoter, whether the obligation to
execute the conveyance became enforceable and whether the
promoter committed default in, or otherwise disabled himself
from, executing the conveyance.
31. The enquiry is thus of limited nature. The competent
authority cannot delve into the aspects of title. Nor the finding
of the competent authority precludes a party from agitating the
grievance as to the entitlement of the organization of purchasers
to have the conveyance, before the Civil Court. The remit of
enquiry by the competent authority is, thus, whether the
1 2023 SCC OnLine Bom 1102.
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conditions stipulated for enforcement of the obligation to
execute the conveyance have been satisfied and, if yes, order an
unilateral deemed conveyance.”
(emphasis supplied)

17.
In the case at hand, as noted above, the following facts are rather
incontrovertible. First, the execution of the Development Agreement by
st
the original owner dated 1 May 1985 in favour of M/s Ajit. Second, the
broad stipulations therein in regard to the development of the larger
premises in two distinct portions. First, the society premises with
ground plus seven storied structure comprising of the apartments;
which have been sold by the developer. Second, construction of a
ground plus two storied building for the exclusive use and occupation of
the predecessors-in-title of the Respondent Nos. 2 to 8. Thirdly, there is,
by and large, no dispute over the fact that the society of the apartment
owners was to execute a perpetual lease deed at a nominal lease rent of
Rs. 1/- per annum in respect of the smaller premises in favour of the
th
partners of M/s Ajit. Fourthly, the order dated 19 May 2015 of UDC,
passed by the Competent Authority was expressly made subject to the
condition that the Petitioner-society would execute a perpetual lease in
favour of Respondent Nos. 2 to 8 in accordance with the terms of the
Development Agreement. Indisputably, such a Lease Deed has not been
executed by the Petitioner-society in favour of Respondent Nos. 2 to 8.
Whether the Competent Authority, in the backdrop of the aforesaid
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facts, could have exercised the power to direct the execution of Lease
Deed by the Petitioner-society in favour of Respondent Nos. 2 to 8 is the
moot question?
18.
There can be no duality of opinion that, the power to review an
order already passed by the judicial tribunal or quasi-judicial authority
is not an inherent power. Review is a creature of statute. In the absence
of a mandate, under the law which confers jurisdiction on the judicial
tribunal or quasi-judicial authority to adjudicate or determine the
matter, it is impermissible for the judicial or quasi judicial authority to
review its own order.
19.
In the oft-quoted decision in the case of Patel Narshi Thakershi
2
and Ors. V/s. Shri Pradyumansinghji Arjunsinghji, a three Judge Bench
of the Supreme Court enunciated that it is well settled that the power to
review is not an inherent power. It must be conferred by law either
specifically or by necessary implication.
20.
Following the aforesaid pronouncement and the decisions which
take the same line, in the case of Naresh Kumar and Ors. V/s. Govt.
3
(NCT of Delhi), the Supreme Court postulated that the jurisdiction of
review can be derived only from the statute and, thus, any order of
review in the absence of any statutory provision for the same is a nullity,
being without jurisdiction.
2 (1971) 3 SCC 844.
3 (2019) 9 SCC 416
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21.
In the case of Grindlays Bank Ltd. V/s. Central Government
4
Industrial Tribunal and Ors, in the context of the contention that the
order setting aside the ex-parte award, in fact, amounts to review, the
Supreme Court clarified that, the decision in Patel Narshi Thakershi and
Ors.(supra) , is the authority for the proposition that the power of
review is not an inherent power, it must be conferred either specifically
or by necessary implication. The expression ‘review’ is used in two
distinct senses, namely, (1) the procedural review, which is either
inherent or implied in a court or tribunal to set aside a palpably
erroneous order passed under a mis-apprehension by it, and (2) a
review on merits, when the error sought to be corrected is one of law
and is apparent on the face of the record. It is in the latter sense that
the Court in Parel Narshi Thakershi & Ors(supra), held that no review
lies on merits unless a statute specifically provides for it. When a
review is sought due to a procedural defect, the inadvertent error
committed by the Tribunal must be corrected ex debito justitiae to
prevent the abuse of its process, and such power inheres in every court
or tribunal.
22.
Adverting to the aforesaid judgment in the case of Grindlays Bank
Ltd. (supra), and other judgments which take a similar view, in the case
of Kapra Mazdoor Ekta Union V/s. Management of Birla Cotton and
4 1980 (Supp) SCC 420
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5
Spinning Mills and Ors, a three judge Bench of the Supreme Court
illuminatingly postulated the distinction between the substantive review
and the procedural review, in the following words :
“19. Applying these principles it is apparent that where a
Court or quasi judicial authority having jurisdiction to
adjudicate on merit proceeds to do so, its judgment or order
can be reviewed on merit only if the Court or the quasi judicial
authority is vested with power of review by express provision
or by necessary implication. The procedural review belongs to
a different category. In such a review, the Court or quasi
judicial authority having jurisdiction to adjudicate proceeds to
do so, but in doing so commits a procedural illegality which
goes to the root of the matter and invalidates the proceeding
itself, and consequently the order passed therein. Cases where
a decision is rendered by the Court or quasi judicial authority
without notice to the opposite party or under a mistaken
impression that the notice had been served upon the opposite
party, or where a matter is taken up for hearing and decision
on a date other than the date fixed for its hearing, are some
illustrative cases in which the power of procedural review may
be invoked. In such a case the party seeking review or recall of
the order does not have to substantiate the ground that the
order passed suffers from an error apparent on the face of the
record or any other ground which may justify a review. He has
to establish that the procedure followed by the Court or the
quasi judicial authority suffered from such illegality that it
vitiated the proceeding and invalidated the order made
therein, inasmuch the opposite party concerned was not heard
for no fault of his, or that the matter was heard and decided
on a date other than the one fixed for hearing of the matter
5 (2005) 13 SCC 777
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which he could not attend for no fault of his. In such cases,
therefore, the matter has to be re-heard in accordance with
law without going into the merit of the order passed. The
order passed is liable to be recalled and reviewed not because
it is found to be erroneous, but because it was passed in a
proceeding which was itself vitiated by an error of procedure
or mistake which went to the root of the matter and
invalidated the entire proceeding. In Grindlays Bank Ltd. vs.
Central Government Industrial Tribunal and others(supra), it
was held that once it is established that the respondents were
prevented from appearing at the hearing due to sufficient
cause, it followed that the matter must be re-heard and
decided again.”
(emphasis supplied)”
23.
Incontrovertibly, the Competent Authority is not empowered to
review its own order under the provisions of MOFA, 1963 and the Rules
framed thereunder. If it is a case of the correction of clerical and
arithmetical mistakes or errors that have crept in due to an accidental
sleep or omission, the power to rectify such errors or mistakes can be
legitimately conceded to the Competent Authority. Controversy arises
where the Competent Authority, under the guise of correction or
rectification, ventures into the area of substantive review and modifies
its earlier order by delving into the merits of the matter.
24.
That brings to the fore the question: Whether the impugned order
partakes the character of review or it is in the nature of the enforcement
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of the order of deemed conveyance dated 19 May 2015?
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25.
To explore an answer it may be necessary to extract the relevant
part of the covenant in the Development Agreement. It reads as under:
“6. … … … In order to clear all doubts it has been
specifically agreed by and between the parties hereto that the
four tenants of the Owner namely (i) Ajit Chimanlal Shah, (ii)
Satish Chimanlal Shah, (iii) Mahesh Chimanlal Shah and (iv)
Himanshu Chimanlal Shah (hereinafter to referred to as “the
said four persons”) are to be provided on Ownership Basis
accommodation by constructing a building on the portion of
land as hereinafter mentioned. The said building shall consists
of stilts and two upper floors comprising of four flats to be
known as Building “B”. The said portion of land which is to be
demarcated from the rest of the property is shown on the plan
annexed hereto and thereon marked with yellow colour
boundary line and the Builders “B” to be constructed on the said
portion of land hereafter is also shown on the plan annexed
hereto and thereon marked with red colur boundaryline. The
said portion of land together with the said Building “B” shall
always be in exclusive use, occupation and possession of the
said four persons who shall become the owners of the said
portion of land together with Building “B” constructed thereon
and the said four persons and their families shall have exclusive
right to use the Well water which is on the Southern side of the
boundary wall of the said property and the flat purchasers in the
new building that will be constructed hereafter shall have no
right, title and interest in the said portion of land together with
Building “B” thereon and the said Well. The said Well is also
shown on the plan annexed hereto with Circular Diagram and
thereon shown with Letter “W”. The flat-purchasers in the new
building will be provided access road for going towards Sea by
access road of 5 feet wide is also shown on the plan annexed
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hereto and thereon marked with horizontal lines. The area of
the said portion of land is approximately 617.22 square meters
on which the said Building “B” is to be constructed which shall
always be in exclusive use, occupation and possession of the
said four persons PROVIDED HOWEVER at the time of
execution of the Conveyance of the said property in favour of
the Developers and/or their nominees including a Cooperative
Society, such purchasers of the said property shall execute a
perpetual lease at lease rent of Rs.1/- per year when demanded
in favour of the said four persons referred above in respect of
the portion of the said land together with the said Building “B”
to be constructed thereon hereafter. In the said Conveyance
there will be a covenant from the Purchasers to the effect that
said four persons and their families shall have exclusive right to
use the well water which is on the Southern Side of the
boundary wall of the said property and no flat purchasers shall
be entitled to take any objection for the exclusive use of the said
Well water by said four persons and their families and the flat
purchasers shall give undertaking to the effect that they will
neither use the said Well nor take out any water from the said
Well and that they shall not be responsible for the maintenance
of the said Well.
… … … ”
26.
Taking cognizance of the aforesaid stipulation while granting a
th
Certificate of UDC by order dated 19 May 2015, the Competent
Authority ordered that the UDC to be executed in favour of the
Petitioner-society shall be subject to the condition that at the time of the
execution of the Deed of Conveyance, the Petitioner-society shall
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execute a perpetual lease in favour of Tarun Shah and Ors (now, R2 to
R8) in respect of the smaller premises at a nominal rent of Rs.1/-.
27.
It would be contextually relevant to note that, by the impugned
order, the Competent Authority directed the Petitioner to execute and
registered Lease Deed in terms of paragraph F(i) to (iii) of the Draft
Lease Deed Exhibit ‘G’, in favour of Respondent nos. 2 and others . The
clauses f(i) to (iii) of the draft Lease Deed (Exhibit ‘G’) read as under:
“F. As per the said Development Agreement, (i) Ajit
Chimanlal Shah (“Ajit”), (ii) Satish Chimanlal Shah (“Satish”),
(iii) Mahesh Chimanlal Shah (“Mahesh”) and (iv) Himanshu
Shah (“Himanshu”) are entitled to the following (“the said
Entitlement”):
(i) Perpetual lease as owners of the said Land at yearly rent of
Rs.1/- (Rupees One Only) together with the building/s and/or
structure/s standing thereon or which may hereafter be erected
thereon.
(ii) Ownership of the structure on the said Land.
(iii) Exclusive right to use the said Water Well.”
28.
The aforesaid clauses are inconformity with the contractual
obligations of the Petitioner-society under the Development Agreement.
At any rate, the aforesaid clauses do not travel beyond the contractual
obligations incurred by the promoter whose right, title and interest has
been conveyed to the Petitioner-society pursuant to the deemed
th
conveyance order of 19 May 2015. The certificate of UDC has been
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granted and the deed of deemed conveyance has been executed subject
to fulfillment of aforesaid condition.
29.
Can the Petitioner-society be permitted to wriggle out of the
situation?
30.
On first principles of law, the Petitioner-society cannot be
permitted to, on the one hand, derive the benefit under Development
Agreement and, on the other hand, deny its liability to execute a
perpetual Lease Deed in favour of Respondent Nos. 2 to 8. The
Petitioner-society cannot approbate and reprobate. Secondly, it is
pertinent to note that, the apprehension on the part of the Petitioner-
society stems from the proposed unrestrained development over the
smaller premises and thereby blocking the sea view of the members of
the Petitioner-society. Indeed, the instruments on record do not indicate
that any such obligation not to erect the building on the smaller
premises beyond a particular height, was incurred by the predecessor-
in-title of Respondent Nos. 2 to 8,
31.
The thrust of the submission of Mr. Chinoy was that the context
in which the Development Agreement came to be executed fully
justified such an inference. Otherwise, there was no reason to restrict
the height of the building on the smaller premises to two story only.
32.
I am afraid, such a submission can be countenanced. If the
Petitioner-society takes refuge under the purported context of the
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transaction and offers the same as an excuse for not executing the
perpetual Lease Deed in favour of Respondent Nos. 2 to 8, then it is for
the Petitioner-society to initiate appropriate proceedings seeking
appropriate declaratory and injunctive reliefs.
33.
The Petitioner-society cannot be permitted to resile from its
contractual obligations and withhold the execution of the perpetual
Lease Deed in favour of Respondent Nos. 2 to 8 on the basis of an
apprehension that if Respondent Nos. 2 to 8 carry out unrestrained
development of the smaller premises, the rights of the members of he
Petitioner-society would be jeopardised.
34.
Viewed from the aforesaid standpoint, in the considered view of
this Court, the impugned order cannot be construed disjuncted from the
th
order of deemed conveyance dated 19 May 2015. The impugned order
underscores the obligation which was incorporated in the Development
Agreement and incurred by the promoter on behalf of the prospective
purchasers.
35.
The direction for execution of the perpetual Lease Deed in terms
of the Development Agreement; the clauses of which were specifically
incorporated as a part and parcel of the Agreement for Sale, executed
by the Promoter in favour of the individual flat purchasers, under the
caption “Relevant covenants and agreements contained in the
st
Development Agreement dated 1 May 1985 which shall be binding on
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the builders and and flat purchasers herein”, is in the nature of the
enforcement of the obligation of the promoter. The conveyance of right,
title and interest of the promoter in the society premises was evidently
burdened by the obligation to execute the perpetual Lease Deed in
favour of Respondent Nos. 2 to 8. The Petitioner-society, therefore,
cannot be heard to urge that the right, title and interest of the promoter
in the society premises would devolve upon the Petitioner-society but
not the obligation attached thereto.
36.
A profitable reference can be made to a judgment of the Supreme
Court in the case of Rajasthan State Industrial Development And
Investment Corporation And Anr Vs Diamond & Gem Development
6
Corporation Limited and Anr, where the Supreme Court expounded the
principle of “Approbate and Reprobate” as under:
“ I. Approbate and reprobate
15. A party cannot be permitted to “blow hot-blow cold”,
“fast and loose” or “approbate and reprobate”. Where one
knowingly accepts the benefits of a contract, or conveyance, or of
an order, he is estopped from denying the validity of, or the
binding effect of such contract, or conveyance, or order upon
himself. This rule is applied to ensure equity, however, it must
not be applied in such a manner so as to violate the principles of,
what is right and of good conscience.”
(emphasis supplied)
6 (2013) 5 SCC 470.
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7
37.
In the case of Union of India and Ors Vs N. Murugesan And Ors,
the principle of “Approbate and Reprobate” was further elucidated in
the following words:
“Approbate and reprobate
26. These phrases are borrowed from the Scott’s law. They
would only mean that no party can be allowed to accept and
reject the same thing, and thus one cannot blow hot and cold.
The principle behind the doctrine of election is inbuilt in the
concept of approbate and reprobate. Once again, it is a principle
of equity coming under the contours of common law. Therefore,
he who knows that if he objects to an instrument, he will not get
the benefit he wants cannot be allowed to do so while enjoying
the fruits. One cannot take advantage of one part while rejecting
the rest. A person cannot be allowed to have the benefit of an
instrument while questioning the same. Such a party either has
to affirm or disaffirm the transaction. This principle has to be
applied with more vigour as a common law principle, if such a
party actually enjoys the one part fully and on near completion
of the said enjoyment, thereafter questions the other part. An
element of fair play is inbuilt in this principle. It is also a species
of estoppel dealing with the conduct of a party. … … …”
(emphasis supplied)
38.
The necessary corollary is that, the power of the Competent
Authority under Section 11(4) of MOFA 1963 to grant certificate of
execution of UDC is impregnated with the duty to enforce the obligation
of the promoter and, on account of conveyance, that of the society of
7 (2022) 2 SCC 25.
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the flat purchasers to execute the perpetual lease in favour of
Respondent Nos. 2 to 8. If viewed through this prism, in the considered
view of this Court, the Competent Authority cannot be denuded of the
power to direct the execution of the perpetual lease in favour of
Respondent Nos.2 to 8 which formed an integral part of the right and
interest of the promoter in the society-premises which came to be
conveyed in favour of the petitioner-society.
39.
Thus to the extent the Competent Authority directed the
Petitioner to execute the perpetual Lease Deed in favour of Respondent
Nos. 2 to 8 in accordance with the terms of the Development
Agreement, the impugned order cannot be faulted at. However, the
Competent Authority seems to have erred in providing a default
th
stipulation that, the order of UDC dated 19 May 2015 in favour of the
Petitioner-society and all the consequential actions pursuant thereto
including the execution of the registered deemed conveyance deed in
favour of the Petitioner-society, shall stand determined.
40.
The default stipulation thus assumes the character of a
th
substantive review of the order of deemed conveyance dated 19 May
2015.
41.
What the Competent Authority is empowered to enforce is the
obligation of the promoter. The Competent Authority could not have
thus passed an order which has the ultimate effect of rendering the
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obligation of the promoter to convey his right, title and interest in the
society premises to the society of apartment owners nugatory. In a
situation of the present nature, the Competent Authority could have
directed that, in the event of default on the part of the Petitioner-society
to execute the perpetual lease, the Respondent Nos. 2 to 8 are entitled
to have a unilateral deemed perpetual Lease Deed executed and have it
registered. Such a direction would be in accord with the power
conferred on the Competent Authority under Section 11(4) of the MOFA
1963.
42.
The conspectus of the aforesaid consideration is that, though this
Court is not inclined to interfere with the impugned order to the extent
it directs the Petitioner to execute a perpetual Lease Deed in favour of
the Respondent Nos. 2 to 6 in accordance with the terms of
Development Agreement, yet, the further direction that in the event of
th
default the original order of unilateral deemed conveyance dated 19
May 2015 and all the consequential actions taken pursuant thereto shall
stand determined cannot be sustained. Resultantly, the Petition deserves
to be partly allowed and the impugned order is required to be be
suitably modified.
43.
Hence, the following order:
: O R D E R :
(i) The Petition stands partly allowed.
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(ii) The impugned order directing the Petitioner to
execute and register Lease Deed in terms of paragraph
F(i) to (iii) of the draft Lease Deed, “Exhibit ‘G’” and the
st
Development Agreement dated 1 May 1985, stands
affirmed.
(iii) The direction in the impugned order that in the
event of default in the execution of the Lease Deed, the
th
order dated 19 May 2015 granting UDC in favour of the
Petitioner and all the consequential actions taken in
pursuance of the said order shall stand determined,
stands quashed and set aside.
(iv) The Petitioner-society is granted 30 days time to
execute the Lease Deed in favour of Respondent Nos. 2
to 8 in terms of the impugned order,
(v) In the event of default to execute and register
such Lease Deed, the Competent Authority (R1) shall
issue a Certificate in favour of Respondent Nos. 2 to 8
that they shall be entitled to have a unilateral deemed
lease deed of the smaller premises, under Section 11 of
MOFA 1963, and also to have it registered.
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(vi) Such a certificate be granted by the Competent
Authority within a period of two weeks of the expiry of
the said period of 30 days.
Rule in the aforesaid terms.
No costs.

[N. J. JAMADAR, J.]
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