Bombay HC Restrains Builder From Trading Mithi River-Widening TDR, Preserving Godown Buyers’ Claim Pending Suit

The appellants, purchasers of four godowns on Plot No. 1, claimed that the vendor, Respondent No. 1, had failed to form a society or company and convey the property as required under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (“MOFA”).

They also asserted rights in the open space and in compensation or transferable development rights (“TDR”) arising from the Municipal Corporation’s acquisition of part of the property for Mithi River widening.

The trial court granted interim relief in part but excluded Plot No. 1 and Godown No. 1B from its restraints.

During the appeal, Respondent No. 1 maintained that it had already received a Development Rights Certificate (“DRC”) and had agreed to transfer it to a third party.

MOFA imposes duties on a promoter/vendor to take steps for formation of the purchasers’ organisation and to convey the promoter’s right, title and interest in the property; those obligations cannot be indefinitely postponed.

The Court applied Order VII Rule 3 of the Code of Civil Procedure, 1908, requiring sufficient identification of immovable property in a suit, and held that the description and boundaries in the plaint and sale documents sufficiently identified Plot No. 1.

It also relied on Chheda Housing Development Corporation v. Bibijan Shaikh Farid, which treats FSI/TDR as a benefit arising from land and as immovable property; the Court reasoned that TDR’s market value may fluctuate, making a later monetary award potentially inadequate.

The Court further considered authorities recognising the statutory right to conveyance and the promoter’s duty not to indefinitely retain development potential, including Noopur Developers, Lakeview Developers, Dosti Corporation, Neelkanth Heights Co-operative Housing Society and Nusli Neville Wadia.

The sale agreements identified Respondent No. 1 as vendor, gave the purchasers a joint exclusive right to use the open space abutting the godowns, and contemplated conveyance of the land to their society or company.

The Court therefore found a prima facie basis for the appellants’ claim against Respondent No. 1 under MOFA.

Plot No. 1 was sufficiently described, and the separation of Plot No. 1 from Plots Nos. 2, 3 and 4 in the retirement deed and related material meant that Yamuna Development Corporation was not a necessary party, though it should be joined as a proper party to avoid multiplicity of proceedings.

The Court considered that allowing the DRC to be transferred could deprive the appellants of the benefit of any appreciation in its value; monetary compensation might not adequately preserve that interest.

It consequently held that the trial court had no cogent basis to exclude Plot No. 1 and Godown No. 1B from interim protection.

The trial court’s order was modified to restrain the Municipal Corporation and its officers from transferring further compensation, whether monetary or by TDR, to Respondent No. 1 in respect of Plot No. 1 and the godowns standing on it.

Respondent No. 1 was also restrained from selling, alienating or creating third-party interest in DRC No. RES/0067/2025 during the suit.

The appellants were directed to implead Yamuna Development Corporation and Hiranya Jaysingh Ashar as defendants; the pending interim application was disposed of.