From Agreement to Ownership: Supreme Court’s Interpretation of Deemed Conveyance

Introduction

The Supreme Court in its recent judgement given by division bench consisting of Justice Oka and Justice Bhuyan in Arunkumar H. Shah HUF v. Avon Arcade Premises Co-operative Society Ltd.[1] (hereinafter “Arunkumar H. Shah HUF case”) clarified key aspects of the Maharashtra Ownership Flats Act, 1963,[2] (hereinafter “MOFA”) particularly Section 11’s remedy of deemed conveyance. MOFA, enacted to protect flat purchasers by regulating the construction, sale, and transfer of flats, requires promoters under Section 4 to execute sale agreements and eventually convey title to apartment owners or their society under Section 11(1).

A central legal problem addressed by the Arunkumar H. Shah HUF case is the tension between the statutory mechanism of deemed conveyance under Section 11(3) MOFA, and the persistence of unresolved property or land ownership disputes. Frequently, cooperative housing societies formed by flat purchasers find themselves unable to obtain formal title to the land and building due to the promoter’s default or deliberate delay. MOFA provides a remedy through a summary process that allows societies to obtain a deemed conveyance certificate from the Competent Authority.

However, a recurring issue is that such applications often pertain to properties where third-party claims, family partition agreements, or undivided property interests create underlying title disputes. This raises the legal concern: can and should a statutory authority proceed with title transfer to the society when civil adjudication on ownership remains pending or unresolved? The core conflict is thus between the statutory objective of protecting flat buyers by ensuring timely conveyance, and the principle that complex questions of title must be settled by civil courts.

If the promoter defaults to conveyance the property, Section 11(3) introduced by a 2008 amendment to MOFA allows the society to apply to the Competent Authority for a certificate of deemed conveyance, intended as a “speedy remedy to enforce the promoter’s obligation.”

In the Arunkumar H. Shah HUF case., the society obtained an ex-parte deemed-conveyance certificate for the entire development, subject to a lease of the subject plot to the promoter. The Bombay High Court upheld the decision of Competent Authority while preserving the appellant’s lease rights and allowed the appellant to litigate title issues separately. The Supreme Court in the Special Leave Petition (SLP) framed issues regarding the scope of the Competent Authority’s and Sub-Registrar’s powers under Section 11 of MOFA, ultimately the SLP was dismissed, which affirmed the legality of the Competent Authority’s order.

Factual Background

In 1987, a dissolution deed partitioned a larger plot in Vile Parle (Mumbai) between Lalbhai H. Shah (Lalbhai Plot) and Arun H. Shah HUF (Arun Plot). The deed stipulated that if the Lalbhai Plot was conveyed to a cooperative society of flat purchasers, the society would execute a perpetual lease of the Arun Plot in favour of the appellant. Lalbhai subsequently contributed the Lalbhai Plot as capital to a new firm (the developer), which built a two-winged apartment building. From 1991, the developer entered into registered flat-purchase agreements under MOFA Section 4 with over 90 buyers and obtained an occupation certificate in November 1993 this was followed by the flat purchasers forming Avon Arcade Premises CHS in July 2005.

There was delay in conveying title from promoter to cooperative society therefore the society sought relief from Mumbai District Consumer Forum(Consumer Forum).  In 2017 Consumer Forum directed the developer to convey the Lalbhai Plot. Thereafter on January 13, 2020, the society applied under Section 11(3) for a deemed conveyance of the entire development approximately 2,753 sq. m. The District Deputy Registrar (hereinafter “Competent Authority”) allowed the application ex-parte on September 18, 2020, and issued a certificate of deemed conveyance, expressly requiring the society to execute a permanent lease of the Arun Plot in favour of the appellant.

The appellant filed a petition with the Bombay High Court after being aggrieved. The High Court allowed the appellant to pursue title concerns through a civil complaint, maintained the appellant's lease rights, and affirmed the Competent Authority's ruling. Later, the Supreme Court addressed questions regarding the Competent Authority's powers and granted permission to appeal. 

MOFA’s Purpose and Deemed-Conveyance Remedy

Oka, J. noted in Arunkumar H. Shah HUF case that MOFA’s overarching purpose is to protect flat buyers by regulating builders and ensuring eventual conveyance of title, Section 11(1) “contains the obligation of the promoter to convey title in respect of the land and building developed by him”. Section 11(3) provides a remedy to flat purchasers: if the promoter fails to execute the conveyance within the prescribed period, the society (or association of apartment-owners) may apply, with all executed sale agreements and documents, to the Competent Authority for a certificate enabling “unilateral deemed conveyance” in favour of the society. The 2008 amendment introducing this remedy aimed “to curb malpractices by developers” and “to safeguard the interests of flat purchasers.” In short, Section 11’s deemed-conveyance scheme is a statutory shortcut for an administrative alternative to a civil suit  ensuring that flat purchasers eventually secure legal title despite a defaulting promoter.

The Supreme Court’s judgment reaffirmed these principles. It stressed that MOFA is “enacted with the object of protecting flat purchasers” and that Section 11(3) was meant “to ensure that a speedy remedy is available to the flat purchasers” to enforce the promoter’s conveyance obligation. The Court quoted Section 11 verbatim to highlight this framework.

Powers of the Competent Authority under Section 11

The Supreme Court recognized that the Competent Authority functions in a quasi-judicial capacity when adjudicating a Section 11(3) application. MOFA Rules prescribe a strictly summary procedure: Rule 13(3), 13(4) and 13(5) sets a short outer time limit (6 months) for deciding an application, forbids cross-examination of parties, and obligates the Authority to verify the documents and give the promoter a hearing (principles of natural justice). In practice, the Authority examines whether the conditions of Section 11 are satisfied (for example, that a registered society exists, valid sale agreements and an occupation certificate have been produced, and the promoter has defaulted) and then decides whether a deemed-conveyance certificate should issue.

Furthermore, the Court highlighted that although the Authority has quasi-judicial power, its proceedings are merely summary in nature. It pointed out that Rule 13(5) prohibits cross-examination in its entirety and concluded that, due to the expedited procedure, the Authority "must record reasons" but is unable to conduct in-depth fact-finding or definitively settle title disputes. As the Court put it, the Authority’s role is to ensure promoters fulfil their obligations under MOFA, “not to adjudicate upon the disputed questions of facts which will have an impact on third parties”. Thus, if during the Section 11(3) proceeding serious title demarcation issues or third-party claims emerge, the Authority should not let that derail the remedy; such issues can be left to civil courts later.

Applying these principles, the Court found no defect in the Competent Authority’s order. The appellant had argued that the Arun Plot was outside the scope of the Flat Purchaser Agreements and that issuing a conveyance certificate for it exceeded the Competent Authority’s jurisdiction and substantiated the argument by citing cases of Mazda Construction Co. v. Sultanabad Darshan CHS Ltd.[3](hereinafter “Mazda Constructions”) the Bombay High Court restricted the conveyance to the property beneath the buildings, to support the claim. It underlined that by going beyond the predetermined boundaries asper Flat Purchaser Agreements, the Authority had "overreached." However in Arunkumar H. Shah HUF case the Supreme Court determined that the certificate was legitimate since the entire bigger plot was essentially covered by the flat-purchase agreements and was included in the legislative framework.

Limited Role of the Registration Officer (Section 11(5))

According to MOFA Section 11(5), the Sub-Registrar (Registration Officer under the Registration Act, 1908) takes over the procedure after the Competent Authority provides a deemed-conveyance certificate. The role of the Registration Officer is strictly ministerial and limited by the legislation, the Supreme Court emphasised. Under Section 11(5), the Registration Officer must issue a notice to the promoter and give him a hearing on why the unilateral conveyance should not be registered as a deemed conveyance. However, the Officer is not an appellate or revisional authority. He cannot re-examine the merits of the Competent Authority’s certificate or the underlying facts. As the Court put it, the Registration Officer “has no power to sit in appeal over the order of the competent authority”. In effect, once the formal requirements (execution, stamp duty, required consents) are met and no statutory obstacle is shown, the officer must register the deed as a deemed conveyance.

This limitation protects flat purchasers by ensuring that, once a deemed-conveyance certificate is properly issued, their title cannot be derailed by the Registration Officer. The Court explained that Section 11(5) of MOFA serves chiefly to give the promoter one last opportunity to point out any statutory obstacle (e.g. stamp issues, encumbrances, or a court stay) before final registration. For example, if prior governmental permission is required or there is a restraining order, the Registration Officer may withhold registration until those issues are resolved. But absent such issues, his duty is to register the certificate; any broader “reopening” of the case is impermissible.

Jurisdictional Boundaries and Homebuyer Protection

The Arunkumar H. Shah HUF case explains the interplay between MOFA proceedings and civil/judicial proceedings. The Supreme Court restated that MOFA’s deemed-conveyance remedy is supplemental to and not a substitute for ordinary civil adjudication of title. Consistent with prior Bombay High Court rulings in Marathon Next Gen Realty Pvt. Ltd. v. Competent Authority,[4] (hereinafter “Marathon Next Gen Realty Pvt. Ltd case)”  ACME Enterprises and Anr v. Deputy Registrar, Co-operative Societies and Otr,[5] (hereinafter “ACME Enterprises case”) and Supreme Court precedents in Abdul Kuddus v. Union of India,[6] (hereinafter “Abdul Kuddus case”) it held that the Competent Authority “is not empowered to adjudicate upon disputed questions of fact” or resolve the entire lies between parties. Therefore, buyers need not fear that their title rights are finally lost under a deemed conveyance; any legitimate dispute can be taken to court.

In another recent Bombay High Court decision of Ravi Jagannath Agarwal v. Prince Tower CHS Ltd., 2024,[7] the court upheld a deemed-conveyance order despite ongoing litigation over title and ownership of the land, reinforcing that Section 11(1) entitles the society to seek conveyance even when disputes exist on the land.

For homebuyers, this judgment is significant as It affirms that MOFA’s fast-track remedy remains available and will be honoured so long as statutory conditions are met. At the same time, it assures buyers that their ownership claims are safeguarded. In practice, once a deemed-conveyance certificate issues, flat purchasers receive a governmental imprimatur to register title. Even if later litigation arises over the extent of the land or other issues, the property is not stripped away from them therefore the certificate merely provides standing to register, subject to any civil adjudication later.

Therefore, by defining the functional boundaries between the Competent Authority under MOFA and the jurisdiction of civil courts, the Supreme Court has resolved doctrinal tension. The ruling reiterates that although the Competent Authority functions in a quasi-judicial manner, its authority is restricted to confirming adherence to the legal requirements outlined in Section 11(3), including evidence of registered sale agreements, society formation, occupancy certificate issuance, and promoter default. It lacks the authority to settle disputes over property rights or make decisions on substantive ownership claims. Crucially, the Court maintained that the Authority may still approve the presumed conveyance even in cases where third-party interests or leasehold rights are involved, so long as those rights are specifically safeguarded in the certificate.

The Court underlined that the conveyance method does not negate or impair valid claims by upholding the conveyance subject to Arun HUF's perpetual lease rights. Rather, it preserves the availability of civil remedies for all parties while facilitating administrative title transfer in the society's Favor. The legal stance that MOFA's remedy is protective and procedural in character rather than final or exclusive is strengthened by this analytical framework, which also upholds the distinction between administrative enforcement and judicial title determination.

Relevant Judicial Pronouncements: Preceding Arunkumar H. Shah HUF case

A number of previous rulings serve as examples,  In Mazda Construction[8] The Bombay High Court emphasised that a presumed transfer must adhere closely to the underlying agreements. The Competent Authority in the case had mandated the conveyance of the adjacent roads and gardens in addition to the flat lands. By restricting the conveyance to the property beneath the structures, the High Court invalidated that portion of the decree. It underlined that the Authority must "adhere strictly to the statutory provisions and existing agreements" since it had "overreached" by going beyond the designated region. This supports the argument made in the Arunkumar H. Shah HUF case that the Competent Authority cannot go beyond the parameters of Section 11 or punish the promoter for actions that are not within MOFA's jurisdiction.

Other decisions like Marathon Next Gen Realty Pvt. Ltd case [9] and ACME Enterprises case[10] have held that the Competent Authority cannot resolve private disputes or third-party rights. Similarly, the Supreme Court in Abdul Kuddus case [11] denied writ relief against a deemed-conveyance order, observing that MOFA provides the remedy and any challenge to the order lies in a private suit, not a writ petition. Arunkumar H. Shah HUF particularly stated that writ courts should be “slow” to interfere and that civil suits should remain open this echoes trend of deferring to the MOFA scheme while preserving ordinary judicial oversight.

Conclusion

In conclusion, the Arunkumar H. Shah HUF decision provides significant jurisprudential elucidation on an enduring legal query: Does MOFA's presumed conveyance process get in the way of unresolved title or property ownership disputes? As long as the Competent Authority adheres to the required summary procedure, satisfies the statutory criteria, and protects any third-party rights, including leasehold interests, the Supreme Court has categorically ruled that such disagreements do not exclude the statutory process.

The administrative goal of guaranteeing prompt title transfer to housing societies and the civil court's exclusive jurisdiction over substantive property rights are two separate but connected legal areas that are satisfactorily reconciled by this decision. It settles a significant legal dispute that has previously made it more difficult to enforce flat buyers' rights under MOFA. The Court reiterated that although considered conveyance guarantees timely formal title registration, it does not preclude or dictate the result of concurrent civil procedures pertaining to ownership.

The Competent Authority functions in a succinct, quasi-judicial manner in accordance with MOFA Section 11(3). In addition to notifying the promoter, it must verify MOFA compliance, review pertinent papers, including occupancy certificates and sale agreements, and document its justifications for awarding the certificate. However, complicated factual disagreements and title concerns are outside the Authority's authority and should be handled by civil courts.

A housing society can register title to buildings and property covered by executed sale agreements with the help of a deemed-conveyance certificate. Relief is restricted to what these agreements cover, and civil litigation is still required to settle any unnecessary encumbrances or border issues. The Court made it clear that MOFA's process enhances civil adjudication rather than replaces it. In order to expedite registration without preventing current or potential legal claims, flat buyers are given a protected, administrative title certificate.

Section 11(5) transfers the matter to the Registration Officer, who has a strictly ministerial responsibility, when the certificate is issued. He must notify the promoter and confirm that all procedures, including stamp duty and required consents, are being followed. He does not, however, have the power to reconsider the Competent Authority's ruling or examine its substantive merits.

MOFA's fast-track remedy protects homebuyers without eradicating the rights of other claimants by guaranteeing timely conveyance while maintaining substantive legal rights. This balance is highlighted by the Court's handling of the appellant's lease rights in the Arunkumar H. Shah HUF case. Unresolved claims may go to adjudication even after registration. As a result, the method offers flat buyers strong security while preserving access to legal channels for all parties involved.

In summary, as this ruling makes clear, MOFA's deemed-conveyance procedure strengthens the rights of flat buyers while cooperating with the civil court. The decision provides a logical legal framework for handling MOFA petitions without jeopardising preexisting legal rights by reaffirming the separate but complementary functions of the Competent Authority and the Registration Officer.

[1] Arunkumar H. Shah HUF v. Avon Arcade Premises Co-operative Society Ltd., Civil Appeal No. 5377 of 2025 (Arising out of Special Leave Petition (C) No. 5432 of 2021), decided on April 21, 2025.​

[2] The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963.

[3] 2012:BHC-AS:19007

[4] (2015) 5 Maharashtra Law Journal 318

[5] (2023) SCC Online Bombay 1102

[6] (2019) 6 SCC 604

[7] 2024:BHC-OS:5895

[8] Supra Note 3

[9] Supra Note 4

[10] Supra Note 5

[11] Supra Note 6