Supreme Court clarifies limits of competent authority under MOFA and upholds deemed conveyance subject to lease
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A bench of Justices Abhay S. Oka and Ujjal Bhuyan heard Civil Appeal No. 5377 of 2025 arising out of Special Leave Petition (C) No. 5432 of 2021, in which Arun Hiralal Shah HUF (appellant) challenged the Bombay High Court's confirmation of an order of the competent authority under Section 11 of the Maharashtra Ownership Flats Act, 1963 (MOFA) granting a certificate of deemed conveyance in favour of a cooperative society and directing execution of a perpetual lease in respect of a portion of the land.
The Court dismissed the appeal and upheld the competent authority's certificate subject to protective conditions for the appellant's leasehold rights. The Court held that the power of the competent authority under Section 11(3) was quasi‑judicial but exercised by a summary procedure and therefore "cannot conclusively and finally decide the questions of title"; aggrieved parties retained the right to pursue civil suits. The Court emphasised that the registration officer under Section 11(5) could not sit in appeal over the competent authority and could refuse registration only on limited grounds (such as non‑production of statutory consents, existence of restraint orders, or non‑compliance with stamp duty and procedural requirements). The Court noted that "The MOFA is a beneficial legislation enacted to protect home buyers" and that "proceedings before the competent authority under Section 11(3) are of summary nature." The Court, in its reasoning, observed: “Our conclusions on the interpretation of sub‑sections (4) and (5) of Section 11 of the MOFA are as under:
i. It is no doubt true that quasi‑judicial powers have been conferred on the competent authority while dealing with applications under Section 11(3) of the MOFA. However, proceedings before the competent authority under Section 11(3) are of a summary nature, as can be seen from the MOFA Rules. Therefore, the competent authority, while passing the final order, must record reasons;
ii. The competent authority, while following the summary procedure, cannot conclusively and finally decide the question of title. Therefore, notwithstanding the order under sub‑section (4) of Section 11, the aggrieved parties can always maintain a civil suit for establishing their rights;
iii. The provisions of Section 11 are for the benefit of the flat purchasers. In writ jurisdiction, the Court should not interfere with the order granting deemed conveyance unless the same is manifestly illegal. The writ court should generally be slow in interfering with such orders. The reason is that, notwithstanding the order under Section 11(4), the remedy of aggrieved parties to file a civil suit remains open; and
iv. The registering officer has no power to sit in appeal over the order of the competent authority while exercising the power under Section 11(5). He can refuse registration only on the grounds indicated ... and not beyond. Thus, the scope of the powers conferred on the registering officer is limited.”
Background
The dispute arose from Final Plot No. 61 in Vile Parle (West), originally contributed to a partnership firm by Champaben Hiralal Shah. A 1987 deed of dissolution partitioned the larger plot between Lalbhai (predecessor of certain respondents) and Arun (the appellant), allocating distinct portions: the “Lalbhai Plot” for redevelopment and the “Arun Plot” (building No. 3 and surrounding land) to Arun HUF. The developer (10th respondent) constructed a building on the Lalbhai Plot and executed flat purchase agreements from 1991; an occupation certificate issued in 1993. A cooperative society of purchasers (1st respondent) was registered in 2005. The society obtained an order of deemed conveyance from the competent authority under Section 11(4) of MOFA on 18 September 2020 in respect of the larger plot, conditioned on the society executing a permanent lease in favour of the appellant for the Arun Plot. The appellant challenged that order before the Bombay High Court, which confirmed the competent authority while reserving liberty to the appellant to file a suit; the appellant then appealed to the Supreme Court.
The appellant argued that the Arun Plot was not subject to the FPAs and that the competent authority lacked jurisdiction to adjudicate disputed title and could not receive evidence or finally decide lis affecting third parties. The society and the developer relied on the FPAs, delay in conveyance, MOFA Rules and protections for flat purchasers; they pointed to a prior lease deed dated 16 July 1991 and sub‑clause (h) of the dissolution deed which contemplated a perpetual lease to Arun. The Supreme Court interpreted Section 11 and relevant rules, held that the MOFA procedure was summary and protective of purchasers, reaffirmed the limited scope of the registering officer under Section 11(5), and concluded that the competent authority's order and the High Court's confirmation were not manifestly illegal. The Court directed that registration of the certificate would be subject to the first respondent executing a permanent lease in favour of the appellant on the terms of the dissolution deed and the 1991 lease; it held that, even if such lease were not executed, the appellant's rights under the earlier instruments remained unaffected. The appeal was dismissed; there was no order as to costs.
Case Details: Case No.: Civil Appeal No. 5377 of 2025 (Arising out of SLP (C) No. 5432 of 2021) Case Title: Arunkumar H Shah HUF v. Avon Arcade Premises Co‑operative Society Limited & Ors. Appearances: For the Petitioner(s): Names of counsel not specified in the reported judgment For the Respondent(s): Names of counsel not specified in the reported judgment
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