Promoter Cannot Delay Deemed Conveyance to Indefinitely Exploit Future Additional FSI Arising from Changed FSI Regimes

In brief

The question

1. Whether the Competent Authority exercised an unauthorized power of review or violated the principle of res judicata by entertaining a second application for deemed conveyance after the rejection of the first.

The court held

The Court held that the Authority did not exceed its jurisdiction as the second application was filed per the liberty granted once construction was completed and held that a developer cannot use the possibility of future additional FSI to delay conveyance indefinitely.

It also directed

The Court dismissed the Writ Petition, upholding the order of unilateral deemed conveyance dated 14 July 2025. Invoking its discretionary powers under Article 227, the Court refused to interfere on technical grounds because justice lay with the Society.

01Facts

The Petitioner, a developer, constructed a building named 'Ariisto Cloud' on land owned by Respondent Nos. 3 to 5. Under a Development Agreement and Supplementary Deed (2010), the Petitioner claimed a right to utilize future additional FSI by paying a specific premium to the landowners.

¶ 3

Respondent No. 2 (Society), formed by flat purchasers, filed a first application (No. 179 of 2024) for deemed conveyance. On 10 March 2025, the Competent Authority rejected it as "premature" because construction was allegedly incomplete and FSI remained unutilized, but granted "liberty to file a fresh application".

¶ 5

Subsequently, the Society and landowners entered into consent terms.

¶ 16

The Society filed a second application (No. 56 of 2025) asserting construction was complete as per the Municipal Corporation's certificate dated 23 February 2015.

¶ 6, 10

On 14 July 2025, the Competent Authority granted the unilateral deemed conveyance. The Petitioner challenged this order, arguing the Authority lacked the power to review its earlier rejection and that the second application was barred by res judicata.

¶ 7-8

02Issues

i.1. Whether the Competent Authority exercised an unauthorized power of review or violated the principle of res judicata by entertaining a second application for deemed conveyance after the rejection of the first.

¶ 2, 14, 18

ii.2. Whether a developer can indefinitely delay the statutory obligation to convey land to a society on the pretext of intent to exploit future additional FSI arising from a change in the FSI regime.

¶ 1, 33

03Law Applied

Section 11 of the Maharashtra Ownership Flats Act (MOFA), 1963, which mandates the promoter to convey title to the society within the prescribed period.

¶ 31

Rule 9 of the MOFA Rules, establishing that conveyance must occur within four months of the society's registration.

¶ 32

The Court distinguished the Apex Court ruling in Faime Makers Pvt. Ltd. v. District Deputy Registrar (2025) regarding the lack of inherent power of review in quasi-judicial authorities.

¶ 7, 19, 20

Lakeview Developers v. Eternia CHS Ltd. (2015), which establishes that a developer cannot exploit building potential for eternity without conveying land.

¶ 27

Gadde Venkateswara Rao v. Government of Andhra Pradesh (1966), asserting that discretionary jurisdiction under Article 227 should not be used to restore an illegal order or perpetuate injustice.

¶ 41-42

Provisions in the judgment · 3 · Linked ones open on LawLens

Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 Section 3 Section 4 Section 11

04Reasoning

The Court found that the Competent Authority did not perform a "review" but acted upon the "liberty" granted in the first order.

¶ 22

Unlike Faime Makers or B.K. Corporation, where liberty was contingent on future civil court adjudication, the liberty here was linked to the completion of construction. The building was factually complete as per the 2015 completion certificate.

¶ 23-26, 38

The Court reasoned that the Petitioner’s claim—that conveyance must wait until all potential future FSI under DCPR 2034 is exhausted—is legally untenable under MOFA. Statutory obligations to convey title within four months of society formation override private contractual clauses regarding future FSI exploitation.

¶ 31-33

The Court noted the Petitioner was attempting to "milk" additional FSI that legally belongs to the Society, as the landowner’s rights divest upon the sale of flats and expiry of the statutory period for conveyance.

¶ 33, 46