Landowners who actively participate in construction can be treated as MOFA “promoters” and required to convey title to flat owners’ society, Bombay High Court holds

The petitioners, heirs of the original landowner, challenged the order dated 23 June 2025 by which the Competent Authority issued a certificate of unilateral deemed conveyance under Section 11 of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (“MOFA”) in favour of Respondent No. 3-Society in respect of 3,901.70 sq. m. of land at Juhu, Mumbai.

The petitioners’ father had leased the larger property to the developers for 98 years. The lease required the lessees to construct the building, comply with sanctioned plans, insure the building jointly with the lessor, and hand over the land and building to the lessor upon expiry or earlier termination of the lease; the building was also to vest in the lessor upon determination of the lease.

The developers constructed “Queens Park”, sold flats under MOFA agreements, and assigned their leasehold rights to the Society in 1978.

The petitioners contended that they were merely landowners, that only leasehold rights could be conveyed, that the prior assignment ousted the Competent Authority’s jurisdiction, and that the order violated natural justice because the original notice had been issued to their deceased father.

Whether the petitioners, as heirs of the original lessor/landowner, could be treated as “promoters” under Section 2(c) of MOFA because of the contractual role and control retained by the lessor over construction and the building.

Whether the Society could obtain conveyance of ownership rights in the land and building, although the developers initially possessed and assigned only leasehold rights.

Whether the prior assignment of leasehold rights to the Society eliminated the “failure” contemplated by Section 11(3) of MOFA and deprived the Competent Authority of jurisdiction to issue a deemed-conveyance certificate.

Whether the impugned order was liable to be set aside for violation of natural justice because the notice was issued in the name of the deceased original landowner.

Section 2(c) of MOFA defines “promoter” broadly to include a person who constructs or causes to be constructed a building of flats, as well as his assignees; active participation or control by a landowner in the construction process may therefore make the landowner a promoter.

Section 11(1) obliges a promoter to perfect title and convey his right, title and interest in the land and building to the organisation of flat purchasers, while Sections 11(3)–(5) empower the Competent Authority to facilitate unilateral deemed conveyance where the promoter fails to do so.

In Haroon Hussain Khatri v. Competent Authority, the Court held that a lessor who causes construction through a lessee and is entitled to receive the building upon expiry of the lease assumes the character of a promoter.

A.H. Wadia Trust v. State of Maharashtra establishes that a society cannot obtain rights greater than those held by the promoter; however, that principle does not apply where the landowner is himself treated as a promoter.

Haresh Vijaysinh Bhatia v. District Deputy Registrar holds that an owner-promoter must convey ownership of the land and building and cannot contractually restrict the society to mere leasehold rights.

The Court also applied the principle that there can be no estoppel against a statutory right under MOFA.

The Court relied on Arunkumar H. Shah HUF v. Avon Arcade Premises Co-operative Society Ltd. for the proposition that a deemed-conveyance order does not finally determine the parties’ substantive title disputes, which may still be adjudicated in a civil suit.

The Court distinguished cases involving a passive landowner from the present lease arrangement. The lease did not merely grant vacant land with permission to construct; it required construction within a stipulated period, enabled the lessor to supervise materials and compliance with sanctioned plans, required joint insurance, permitted re-entry upon breach, and provided that the building would vest in the lessor upon expiry or determination of the lease.

These terms demonstrated that the lessor had actively participated in causing the construction and would ultimately acquire ownership of the building. The petitioners therefore fell within Section 2(c)’s expansive definition of “promoter”, and their own title and interest were subject to the conveyance obligation under Section 11.

The Court further held that Clause 40 of the flat-purchase agreements contemplated collection of contributions from purchasers to perfect ownership in the land, and that Clause 34, providing for assignment of leasehold rights, had to be read with that arrangement.

The developers’ 1978 assignment fulfilled only their part of the statutory obligation; because the petitioners, as co-promoters, had not conveyed their interest, a continuing failure under Section 11(3) remained and the Competent Authority retained jurisdiction.

The natural-justice objection also failed because the petitioners had received notice, informed the Authority of their father’s death, but chose not to appear and contest the application; they could not later complain of denial of hearing.

The Society was therefore entitled to conveyance of the promoters’ right, title and interest in the land and building, and the prior assignment of leasehold rights did not bar deemed conveyance against the petitioners.

The challenge to the alleged violation of natural justice was rejected, with liberty preserved to the petitioners to pursue an appropriate civil suit concerning substantive title disputes.

The writ petition was dismissed, and there was no order as to costs.