Happy Homes Plot Owners Co-Op. Housing Ltd. Vs District Deputy Registrar Co Op. Soc. Mumbai City (4) and Ors. (Bombay High Court)
The Bombay High Court considered a writ petition challenging an order dated 21 March 2023 passed by the District Deputy Registrar, Co-operative Societies, Mumbai City (4) and Competent Authority granting a certificate of unilateral deemed conveyance in favour of Respondent No. 3-Society. The impugned order conveyed not only land measuring 2,206.30 sq. metres forming Sector B but also proportionate undivided shares in two recreational grounds (RG 1 and RG 2) and internal roads. The principal objection raised by the Petitioner-Society was that the Competent Authority lacked jurisdiction under Section 11(3) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA).
The Court noted that the Petitioner originally owned the larger parcel of land, which was subdivided into 55 plots for bungalow construction. Subsequently, 24 members opted for flats instead of bungalows, leading to construction of buildings in Sector B and sale-component buildings in Sector C through a developer. Initially, all members continued in the original society, but later the society was bifurcated. By an order dated 14 February 2006, the original society’s registration was cancelled and two separate societies were registered. Thereafter, both societies executed an agreement dated 6 May 2008 allocating land between them. Under the agreement, Sector A comprising 10,851.30 sq. metres with specified plots, gardens, open spaces and internal roads was allotted exclusively to the Plot Owners Society, while Sector B measuring 2,206.30 sq. metres with Buildings A, B and C was allotted exclusively to the Flat Owners Society. Certain garden and internal road portions were agreed to be used commonly.
Respondent No. 3-Society subsequently sought deemed conveyance before the Competent Authority, claiming a proportionate share in the recreational grounds. The Competent Authority granted conveyance not only of Sector B but also proportionate rights in the recreational grounds and internal roads, leading to the present challenge.
Examining the statutory framework, the Court observed that Section 11 of MOFA casts a duty upon the promoter to convey title to the organisation of flat purchasers and empowers the Competent Authority to execute such conveyance where the promoter fails to do so. However, the Court held that bifurcation of cooperative societies is specifically governed by Section 17 of the Maharashtra Co-operative Societies Act, 1960. Section 17(2), beginning with a non obstante clause, provides that upon division and registration of new societies, the registration itself constitutes sufficient conveyance vesting the assets and liabilities of the original society in the newly registered societies, notwithstanding the Transfer of Property Act, 1882 or the Indian Registration Act, 1908.
The Court held that, in the present case, the order of bifurcation together with the agreement dated 6 May 2008 resulted in statutory conveyance of the properties between the bifurcated societies. Consequently, Respondent No. 3-Society had already acquired ownership of Sector B measuring 2,206.30 sq. metres and there was no occasion to invoke Section 11(3) of MOFA for another conveyance. If Respondent No. 3 considered the bifurcation arrangement to have allotted it lesser land than its entitlement, it was required to pursue appropriate remedies available in law. Section 11 of MOFA could not be invoked to rectify or alter the bifurcation arrangement.
Relying on Jay Anand Co-operative Housing Society Ltd. vs. State of Maharashtra and Ors., the Court reiterated that Section 11 of MOFA cannot be used to cure defects in a bifurcation order. It concluded that the Competent Authority had exceeded its jurisdiction by entertaining and deciding the application for deemed conveyance after statutory conveyance had already taken effect through bifurcation.
Accordingly, the Court held that the impugned order suffered from a gross jurisdictional error, set aside the order dated 21 March 2023 passed in Application No. 257 of 2022, and partly allowed the writ petition. It clarified that Respondent No. 3-Society would remain at liberty to pursue any remedies available in law regarding its grievance that it had been conveyed less land than its entitlement, and directed that any such proceedings be decided on their own merits without being influenced by observations made in the present judgment. There was no order as to costs.
Cases Discussed
- Jay Anand Co-operative Housing Society Ltd. vs. State of Maharashtra and Ors. (BOmbay HC), Writ Petition No. 478 of 2020 decided on 30 January 2026
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule is made returnable forthwith. Since pleadings in the Petition are complete, the same is taken up for final hearing with the consent of the learned counsel appearing for parties.
2. By this Petition, Petitioner-Society has challenged order dated 21 March 2023 passed by District Deputy Registrar, Co-operative Societies, Mumbai City (4) and Competent Authority, granting certificate of unilateral deemed conveyance of land admeasuring 2,206.30 sq.mtrs. as well as undivided share of land admeasuring 187.958 sq.mtrs. in RG 1 and 296.874 sq.mtrs. in RG 2 as well as undivided share 552.96 sq.mtrs. in internal roads in favour of Respondent No.3-Society.
3. I have heard Mr. Kadam, the learned counsel appearing for Petitioner, Mr. Gantha, the learned counsel appearing for Respondent No. 3, Mr. Sharma, the learned counsel appearing for Respondent No. 5 to 9 and Mr. Bhadang, the learned AGP for Respondent-State and have considered the submissions canvassed by them.
4. The principal objection by the Petitioner-Society is to the jurisdiction of Competent Authority under Section 11(3) of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA).
5. In the present case, initially Petitioner-Society was the owner in respect of the entire larger portion of land. The Petitioner-Society purchased the land for the purpose of allotting 55 Plots to its members for construction of bungalows. The land was sub divided in the year 1973 into 55 Plots. However, 24 members of the Petitioner-Society apparently did not have means of constructing bungalows and opted for construction of Flats on their Plots. In order to fulfil the desire said 24 members, the Petitioner-Society engaged M/s Happy Home Builders for construction of 24 flats on 6 plots and to cover the costs of construction of buildings, it was decided to surrender 18 plots to the developer for construction of sale-component building. Accordingly, it was decided by the Petitioner-Society to identify the land forming part of bungalows as Sector A, the land forming part of buildings containing 24 flats for the members as Sector B and land forming part of 18 plots for construction sale component building as Sector C. This is how buildings were constructed on land bearing Sector B for accommodation of 24 members in flats. The developer has constructed separate buildings in Sector C and has sold of lands to outside persons. In the present Petition, there is no dispute about construction caused on land bearing Sector C.
6) Initially, even 24 members who where allotted flats continued to be the members of the Petitioner-Society. However, subsequently, those 24 members decided to form a separate Society by bifurcation of the Petitioner-Society. Accordingly, it was decided to bifurcate the original Society into two separate Societies. Upon proposal being submitted to the District Deputy Registrar, an order of bifurcation was passed on 14 February 2006, thereby canceling the registration of the original Society and two Societies, by name Happy Homes Plot Owners Co-operative Housing Society and The Happy Homes Flat Owners Co-operative Housing Society, were registered. Both the Societies entered into an Agreement dated 6 May 2008 for deciding various issues arising out of bifurcation and agreed for an arrangement that land admeasuring 10,851.30 sq.mtrs., comprising of Plot Nos. 12 to 42 along with gardens/open spaces and the internal roads within Sector A shall belong exclusively to the Plot Owner Society and land bearing Sector B admeasuring 2206.30 sq.mtrs. shall belong exclusive to Respondent No. 3-Society. It was further agreed that garden abutting Sectors B and C shall be used by both the Sectors in common. This is how an arrangement was agreed for land division between the two Societies.
7. It appears that Respondent No. 3-Society was not happy with allotment of land of only 2206.30 sq.mtrs. and wanted a share in the two RGs in the layout. Accordingly, Respondent No. 3-Society filed application for deemed conveyance before the Competent Authority. By the impugned order dated 21 March 2023, the Competent Authority has granted certificate of unilateral deemed conveyance, conveying not just land admeasuring 2,206.30 sq.mtrs. (forming part of Sector B), but has also granted proportionate rights in the two RG’s as well as internal roads in favour of Respondent No.3-Society. Aggrieved by the order of the Competent Authority granting proportionate share in RGs and in the internal roads, the Petitioner-Society has filed the present Petition.
8. Section 11 of MOFA essentially casts a duty on the promoter to perfect his title and to convey the same to the organization of flat purchasers. In the event there is failure on the part of the promoter to convey the land and the building, the Competent Authority steps into the shoes of the promoter and executes the conveyance in favour of organization of flat purchasers. However, when bifurcation of Societies occur, there is a special provision under Section 17(2) of the Maharashtra Co-operative housing Societies Act, 1960 (MCS Act), dealing with conveyance of the property Section 17 of the MCS Act provide thus:
17. Amalgamation, transfer, division or conversion of societies
(1) A society may, with the previous approval of the Registrar, by resolution passed by two-thirds majority of the members present and voting at a special general meeting held for the purpose, decide-
a. to amalgamate with another society;
b. to transfer its assets and liabilities, in whole or in part, to any other society;
c. to divide itself into two or more societies; or
d. to convert itself into another class of society:
Provided that, when such amalgamation, transfer, division or conversion, aforesaid, involves a transfer of the liabilities of a society to any other society, no order on the resolution shall be passed by the Registrar, unless he is satisfied that-
i. the society, after passing such resolution, has given notice thereof in such manner as may be prescribed to all its members, creditors and other persons, whose interests are likely to be affected (hereinafter in this section referred to as “other interested persons”), giving them the option, to be exercised within one month from the date of such notice, of becoming members of any of the new societies, or continuing their membership in the amalgamated or converted society, or demanding payment of their share or interest or dues, as the case may be,
ii all the members and creditors and other interested persons, have assented to the decision, or deemed to have assented thereto by virtue of any member or creditor or any other interested person failing to exercise his option within the period specified in clause (i) aforesaid, and
(iii) all claims of members and creditors and other interested persons, who exercise the opinion within the period specified, have been met in full or otherwise satisfied:
[Provided further that, in case of societies doing the business of banking, no such amalgamation, transfer, division or conversion shall be initiated without the prior approval of the Reserve Bank of India.]
(2) Notwithstanding anything contained in the Transfer of Property Act, 1982, or the Indian Registration Act, 1908, in the event of division or conversion, the registration of the new societies or, as the case may be, of the converted society, and in the event of amalgamation, on the amalgamation the resolution of the societies concerned with amalgamation, shall in each case be sufficient conveyance to vest the assets and liabilities of the original society or amalgamating societies in the new societies or converted or amalgamated society, as the case may be.
(3) The amalgamation of societies, or division or conversion of a society shall not affect any rights or obligation of the societies so amalgamated, or society so divided or converted, or render defective any legal proceedings which might have been continued or commenced by or against the societies which have been amalgamated, or divided or converted; and accordingly, such legal proceedings may be continued or commenced by or against the amalgamated society, or, as the case may be, the converted society, or the new societies.
(4) Where two or more societies have been amalgamated, or a society has been divided or converted, the registration of such societies or society shall be cancelled on the date of registration of the amalgamated society, or the converted society, or the new societies between which the society may have been divided.
(Emphasis supplied)
9. Thus, Section 17 (2) of the MCS Act is a unique provision, under which mere act of registration of the new Societies, consequent to division of original Society, constitutes a conveyance for vesting of the assets and liabilities of the original Society in the new Societies. Subsection (2) of Section 17 begins with non obstante clause and the same operates notwithstanding the provisions of the Transfer of Property Act, 1882 and the Indian Registration Act, 1908. It thus appears that upon bifurcation/division of a Society and upon registration of new Societies, the assets and liabilities of the original Society aromatically get vested by way of conveyance in the new Societies. Section 17(2) of the MCS Act is aimed at obviating the necessity of execution of a separate document of conveyance for vesting of properties of the original Society into the new Societies after of bifurcation/Division. The arrangement agreed at the time of bifurcation constitutes a conveyance between the two bifurcated Societies.
10. In the present case, at the time of bifurcation, the 2 Societies agreed for following arrangement vide Agreement dated 6 May 2008:-
4. With regard to the transfer of land to either party it is hereby agreed that sector ‘A’ marked in the Property Layout with land area of 10851.30 sq. mtrs. Consisting of Plots nos. 12 to 42 with the garden/Open space and the length of Internal Roads within that Sector belongs exclusively to the Plot Owners Society and Sector “B’ comprising land areas of 2206.30 sq. mts. with the 3 buildings A, B and C belongs exclusively to the flat Owners Society. Both parties also agree that as provided in the Development Agreement with Happy Home Builder, the Garden abutting sectors ‘B’ and ‘C’ is to be used by both the Sectors and the stretch of the Internal Road from the main gate of the Complex upto the northern end of Sector ‘C’ is to be used in common by all the Societies in the Residential Complex.
11. Thus, there is statutory conveyance within meaning of Section 17(2) of the MCS Act, in respect of a bifurcated Societies. In these circumstances, the Competent Authority cannot exercise jurisdiction under Section 11(3) of MOFA and convey to one out of the bifurcated Societies land contrary to the arrangement agreed at the time of bifurcation. The bifurcation itself confers title in the land in respect of both the Societies. By virtue of order of bifurcation as well as the Agreement dated 6 May 2008, Respondent No.3-Society has already become owner in respect of land admeasuring 2,206.30 sq.mtrs. Since it had already acquired ownership in the land, there was no question of Respondent No. 3-Society exercising a remedy under Section 11(3) of MOFA.
12. In the event Respondent No. 3 is aggrieved by the arrangement agreed between parties at the time of bifurcation, it will have to adopt necessary remedies in that regard. Section 11 of MOFA cannot be a remedy to rectify errors, if any, in the order of bifurcation. In my view therefore, the Competent Authority has grossly overstepped its jurisdiction while entertaining and deciding Application of Respondent No. 3-Society under Section 11 of MOFA. Since there is already a conveyance of land, Competent Authority cannot once again convey the land under Section 11 of MOFA.
13. In Jay Anand Co.operative Housing Society Ltd. vs. State of Maharashtra and Ors. 1, this Court has held that Section 11 of MOFA cannot be used to cure the defects in the bifurcation order. In my view, if Respondent No. 3-Society believes that it has been conveyed lesser land under the bifurcation arrangement, it cannot take route under Section 11 of MOFA for claiming higher portion of land in the lay out.
14. Since, order passed by the Competent Authority suffers from gross jurisdictional error, the same is liable to be set aside. The Petition accordingly succeeds in part. Order dated 21 March 2023 passed by the Competent Authority in Application No. 257 of 2022 is set aside. Respondent No. 3-Society would be at liberty to exercise the remedies available in law in respect of its grievance of conveyance of lesser land than its entitlement. Such proceedings shall be decided on their merits, without being influenced by any observations made in the present order.
15. The Writ Petition is allowed in above terms. Rule is made absolute. There shall be no order as to costs.
Notes:
1 Writ Petition No. 478 of 2020 decided on 30 January 2026
