The Bombay High Court has ruled that a housing society, a company or an association cannot be granted “Unilateral Deemed Conveyance” more than its built up area and area around it, as per the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act (MOFA).
The court emphasised that in a large project, where several buildings are proposed to be constructed over a period of time in a phased manner, certain changes are bound to take place, and individual building / society would be entitled to deemed conveyance for the area it occupies.
Challenges In Deemed Conveyance For Multi-Structure Large Layout Developments
The court was hearing petitions filed by two housing societies – Marathon Era Co-operative Housing Society Ltd in Lower Parel and Gulmohar Lokmilan Cooperative Housing Society Limited in Andheri – which were denied Unilateral Deemed Conveyance by the District Deputy Registrar of Cooperative Societies more than its built up area. The societies were a part of a larger gated community.
Section 11 of MOFA, a welfare legislation meant for the protection of flat purchasers, provides for transfer of the title from the “promoter” to an organisation of persons who take flats. The promoter has the duty to transfer title by executing a conveyance, within a prescribed time, to the ultimate beneficiaries (the flat purchasers). If the promoter fails to do so, the ultimate beneficiaries can apply to a designated statutory authority to obtain this conveyance .
The court noted that disputes usually do not arise in cases of a single plot development, but arise in cases of ‘layout development’ undertaken over a long period of time in phases. In such multi-structure large layout development, the buildability is not computed on the basis of each plot on individual land record specific units in the layout. There is an assessment of the maximum buildability of the entire layout taken as a whole. This makes not only the development more complex but also changes the legislative and statutory terrain.
Complexities In Internal Allocation And Built-Up Area In Multi-Structure Developments
The FSI for the plot is “not evenly distributed across the layout”. While the maximum permissible built up area is known, the internal allocation within the layout is determined by the promoter or developer and is unrelated to any particular land revenue record.
Marathon Next Gen, is the owner of a larger property, which on land that once belonged to one of Mumbai’s now defunct cotton textile mills.
The entire Marathon project, spread over roughly 35000 sq mtrs plot, has two structures Marathon Era and Marathon Innova. The Era is a residential complex of four wings. Marathon Innova is supposedly for commercial use. In addition, there is a car parking tower of ground and four floors with a clubhouse on the fifth level and a designated recreation ground.
An area of 6787.82 sq mtrs was to be used to construct all four wings of Marathon Era. The society was registered in January 2010. The dispute arose after the BMC issued an Occupation Certificate.
Challenges In Correlating Built-Up Area With FSI In Multi-Building Developments
Marathon Era got a certificate on July 11, 2015, from Architects (M/s Patidar Alliance). This showed that a little over of 56% of the larger property ‘would be required’ by Marathon Era ‘to sustain its built up area’.
The court remarked that the society has drawn a direct correlation between the built up area of a building in a phased multi-building layout development and the FSI required. “This is not only impractical but virtually impossible. The FSI is computed on the entire layout and its internal allocation to any particular construction is unrelated to a specific smaller area,” a bench of Justices Gautam Patel and Kamal Khata said on April 18. “The Petitioner society cannot insist simultaneously on its footprint area of 6787 sq mtrs, its entire built up area of 29000 and then lay claim to a greater portion or slice of the larger property.”
BMC's Amended Plan And Legal Representation In Deemed Conveyance Case
In August 2016, the BMC approved yet another amended plan and accordingly, plans were amended.
On April 10, 2017, the District Deputy Registrar passed an order declining to grant deemed conveyance, which was challenged before the HC.
Marathon Era was represented by senior counsel Darius Khambata. Developer was represented by senior advocate Pravin Samdani and Marathon Innova was represented by advocate Vvek Kantawala.
“Two principles emerge. First, while additional FSI may be used, it cannot be used in a manner that would reduce the promised or assured facilities and amenities. That is settled law. Second, the FSI already used in the completed building cannot be compromised in any way. It cannot be reduced either,” the bench Noted.
The court, while dismissing the petition, granted leave to the society to file a fresh application to be decided by the competent authority in accordance with law.
