Supreme Court Upholds Deemed Conveyance Order Protecting Both Flat Purchasers’ and Original Owner’s Rights

The Supreme Court of India recently delivered a significant judgment in the case of Arunkumar H Shah HUF versus Avon Arcade Premises Co-operative Society Limited & Ors., upholding a deemed conveyance order while protecting the rights of both flat purchasers and the original property owner. The judgment, delivered by Justices Abhay S Oka and Ujjal Bhuyan on April 21, 2025, provides important clarifications on the scope of powers of competent authorities under the Maharashtra Ownership Flats Act (MOFA).

The dispute centered around a property in Vile Parle, Mumbai, originally owned by Champaben Hiralal Shah. Through a series of partnership deeds and dissolution agreements, the property was divided between her sons – with one portion (Lalbhai Plot) going to Lalbhai’s family and another (Arun Plot) to Arun’s family (the appellant). The developer (10th respondent) constructed buildings on the Lalbhai Plot and sold flats, but failed to execute conveyance for over three decades, leading the flat owners’ society (1st respondent) to seek deemed conveyance under MOFA.

The Supreme Court carefully analyzed the deed of dissolution dated February 13, 1987, noting that it clearly demarcated the Arun Plot (903.06 sq m) for the appellant while allocating the Lalbhai Plot (1823 sq m) for development. The Court observed: “Clause 6 reiterates that the Arun plot on the plan Exhibit ‘A’ shall belong to Arun HUF, representing the present appellant.” This formed the basis for protecting the appellant’s rights while still allowing conveyance to proceed.

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The judgment provides important interpretations of MOFA provisions, particularly Section 11 which deals with deemed conveyance. The Court clarified that while competent authorities have quasi-judicial powers, their proceedings are summary in nature. “The competent authority, while following the summary procedure, cannot conclusively and finally decide the questions of title,” the Court noted, adding that civil suits remain open for title disputes.

The Court upheld the competent authority’s order granting deemed conveyance of the entire plot to the society, while protecting the appellant’s rights through a condition requiring execution of a permanent lease for the Arun Plot. The judgment states: “The lease shall be on the terms and conditions incorporated in the deed of dissolution and the lease deed dated 16th July 1991.” This balanced approach protected both the flat purchasers’ need for conveyance and the original owner’s property rights.

In its conclusions, the Supreme Court laid down important principles: competent authorities must record reasons but cannot finally decide title questions; writ courts should generally not interfere with conveyance orders unless manifestly illegal; and registering officers have limited powers to examine conveyance certificates. The judgment emphasizes MOFA’s purpose as beneficial legislation for flat purchasers while ensuring original owners’ rights are not arbitrarily extinguished.

Petitioner Name: Arunkumar H Shah HUF.
Respondent Name: Avon Arcade Premises Co-operative Society Limited & Ors..
Judgment By: Justice Abhay S Oka, Justice Ujjal Bhuyan.
Place Of Incident: Vile Parle, Mumbai.
Judgment Date: 21-04-2025.
Result: dismissed.

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