Developers Cannot Exploit Building Potential For Eternity To Delay Conveyance: Bombay HC

The Bombay High Court clarified that developers cannot indefinitely delay the conveyance of land by citing potential future development rights or disputes regarding Floor Space Index (FSI). The Court emphasized that statutory obligations under the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, must be fulfilled within the prescribed timelines once the existing development potential of the property has been exhausted.

Justice Sandeep V. Marne, presiding over the matter, heard a challenge by a developer against a unilateral deemed conveyance order. The Court modified the original order to exclude specific portions of land already surrendered or reserved for public purposes, while upholding the societies' right to a joint conveyance for the land they physically occupy.

Court's Rationale on Statutory Obligations and Future FSI

The Court rejected the developer's argument that conveyance should be delayed until the completion of the entire layout, including proposed buildings that were stalled due to FSI deficits. The Court, in its reasoning, observed: "...the developer cannot claim that he can continuously exploit the building potential for eternity without conveying the land in favour of the Society. The obligation to convey the land in favour of the Society within a prescribed time... remains unfettered. If the full development potential of the land is exhausted and the obligation for conveyance of land in favour of the Society has arisen as per the Act and Rules and if the developer fails to do so then any further benefit which would accrue to the developer on account of any additional TDR or FSI made available, cannot be used by him for the purpose of construction of additional buildings."

Impact of Civil Court Decrees on Deemed Conveyance

Addressing the Petitioner's objection that a previous Civil Court decree restricted the conveyance area, the Court noted that the subsequent introduction of the deemed conveyance remedy under Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 provided a swifter alternative. It held that withdrawing a civil appeal to pursue a joint deemed conveyance application was a valid legal course of action for societies facing long-delayed title transfers.

Directions Issued to the Competent Authority

The Court has the following directions:

"(i) Order dated 15 May 2017 passed by the Competent Authority as well as certificate of unilateral deemed conveyance issued in pursuance thereof are set aside.

(ii) Application No. 119 of 2016 is remanded to the Competent Authority for the limited purpose of issuing certificate of unilateral deemed conveyance in respect of land admeasuring 16584.55 sq.mtrs in favour of Respondent Nos.1 to 3 -Societies within a period of 3 months.

(iii) Parties shall appear before the Competent Authority on 24 June 2026 along with copy of this order downloaded from the website of the Court."

Background:

The dispute arose regarding a layout in Vile Parle where the Petitioner-Developer had constructed 12 buildings (A to M) but failed to construct two more (N and P) due to a dispute with the MCGM over land surrendered for a DP road. The developer argued that since Building Nos. N and P were still 'proposed', they were entitled to withhold conveyance of the entire 21,736 sq. mtrs plot.

Respondent societies, some formed as early as the 1970s, sought joint deemed conveyance. Relying on Lakeview Developers Versus. Eternia Co-operative Housing Society Ltd. and Rajkumar Gulati and Ors. Versus. S.D. Corporation Pvt. Ltd. and Ors, the Court found that for over 46 years, no new construction had occurred and the developer could not hold the societies' title hostage to the 'preposterous' idea of utilizing future TDR from reserved lands. The High Court ultimately allowed the petition partly, reducing the conveyance area from 21,736 sq. mtrs to 16,584.55 sq. mtrs to account for road widening, slum encroachments, and municipal reservations.

Case Details:
Case No.: WRIT PETITION NO. 9694 OF 2017
Case Title: Kiran Builders Pvt. Ltd. V/s. Kalpita Enclave Co-operative Housing Society Ltd. And Ors.
Appearances:
For the Petitioner(s): Mr. Mahendra Ghelani with Ms. Nizzica Pinto and Ms. Sneha Vani
For the Respondent(s): Dr. Birendra Saraf, Senior Advocate with Mr. Rohan Savant, Mr. Nirmal Devmani, Mr. Aman Saraf and Mr. Abhijeet Mahadeokar i./b. Mr. Diwakar Gond; Ms. M.S. Bane AGP, for the State

Source: 2026 CaseBase(BOM) 241