Landowners Who Bought Built-Up Plot Lose Challenge To Society’s Lease Assignment: Bombay HC Says Title Claim Belongs In Civil Court

The Petitioners claimed ownership of a 1,237.5 sq. m. plot and challenged the order dated 10 May 2022 by which the Competent Authority granted Respondent No. 3-Society unilateral assignment of leasehold rights in the land.

The Society’s earlier application for deemed conveyance of ownership had been rejected, with liberty to apply again; its subsequent application sought assignment of leasehold rights and was allowed.

The Petitioners disputed the promoter’s title and lease, relying, among other things, on a 1985 decree for possession and alleging that the building was unauthorised.

The Society relied on the promoter’s agreements with flat purchasers, which represented that the promoter held a 97-year lease and undertook to assign its leasehold interest to the Society.

Section 11 of MOFA obliges a promoter to convey its right, title and interest in the land and building to the organisation of flat purchasers; under Sections 11(3)–(5), the Competent Authority may issue a certificate of unilateral deemed conveyance when the promoter fails to perform that obligation.

The Competent Authority’s inquiry is limited: it may address the promoter’s failure to convey, but does not adjudicate competing claims to title, which must be determined by a competent civil court.

A deemed-conveyance certificate does not conclusively determine title and may be challenged in civil proceedings.

The Court distinguished Faime Makers Private Limited v. District Deputy Registrar Co-op Societies (3), Mumbai, 2025 (5) SCC 772, on the facts concerning the prior application and the liberty granted to reapply.

It also applied the supervisory-jurisdiction principles in Garment Craft v. Prakash Chand Goel, (2022) 4 SCC 181: Article 227 is not an appellate jurisdiction for correcting every error, but is exercised to address grave dereliction, flagrant abuse, or perversity.

The Court held that the promoter had represented in the flat-purchase agreements that it held leasehold rights and had undertaken to assign those rights to the Society; its failure to do so permitted the Competent Authority to act under Section 11.

The Petitioners’ objections—including whether a valid lease existed, the effect of the 1985 decree, and the legality of the building—raised matters of title or other disputes beyond the Competent Authority’s limited inquiry.

The Court therefore left the Petitioners to seek appropriate declaratory or injunctive relief in a civil court; the assignment did not conclusively establish the Society’s title.

Res judicata did not bar the second application because the earlier application sought ownership-based conveyance, the later one sought assignment of leasehold rights, and the Competent Authority had granted liberty to apply again with the necessary documents.

Given the limited scope of Article 227 review and the availability of a civil remedy, the Court found no basis to interfere.

It upheld the Competent Authority’s order assigning the promoter’s claimed leasehold rights to the Society, without foreclosing the Petitioners’ right to challenge the Society’s entitlement or title before a competent civil court.