Can a builder's agreement delay deemed conveyance until the whole project is finished? Bombay High Court in Neelkanth Heights, decoded

Your building has stood for years and your society is registered, yet the promoter still holds the land. When the committee asks for the conveyance, it is told to wait until the later phases are built. The Bombay High Court dealt with exactly this situation in Neelkanth Heights.

The case in brief

Three cooperative housing societies in Thane (Rameshwar CHS, Mansarovar CHS and Girija CHS) and their Association asked for a unilateral deemed conveyance of land at Survey No.194/1B, Thane. The land was held under a 99-year lease from 1963. The promoter's development agreement of 4 May 1995, supplemented on 11 January 2002, planned 8 buildings with 740 flats and 29 shops. Section 4 agreements were registered. The three societies were registered between 2005 and 2011. No conveyance was ever executed. The first building was completed about 20 years ago and no further phase was built. The Association was registered on 1 April 2022 under the Maharashtra Cooperative Societies Act, 1960.

The societies passed a resolution on 17 March 2024 and sent the promoter a notice on 19 March 2024 demanding assignment of the lease. They then applied under section 11(3) of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (the MOFA Act). On 15 October 2024 the District Deputy Registrar, Thane, acting as Competent Authority under section 5A, rejected the application. The promoter had argued four things: status quo orders in an unrelated suit, that the Association was improperly constituted or its registration cancelled, that phased development was incomplete and clause 39(1)(a) and (b) of the agreement required full development first, and that it had TDR and additional FSI claims over the land.

The Association and the societies filed Writ Petition No. 165 of 2025 under Article 227. Amit Borkar, J. reserved judgment on 24 April 2025 and pronounced it on 9 May 2025 (2025:BHC-AS:21346).

What the court decided

The court set aside the rejection and made the rule absolute in terms of prayer clauses (a) and (b), with no costs. Its test is in paragraph 36. The Competent Authority under section 11(3) has a duty to grant a certificate of deemed conveyance once it is shown that the promoter was obliged to convey (by statute and contract), that a proper organization of flat takers exists to take the conveyance, and that the promoter failed to convey within the time. The court held these conditions were plainly fulfilled here.

On the phase clause, the court held that under section 11(1) and Rule 9 of the MOFA Rules it was the promoter's legal duty to convey to the societies within four months from the date of their registration, unless a different period was mutually agreed. Clauses 39(1)(a) and (b), which made conveyance depend on full development of the larger property, ran directly contrary to Rule 9. The court, quoting Flagship Infrastructure, said the obligation is "not a matter of contract — it is a matter of law".

The court rejected the other objections too. The status quo order was passed in a suit for redemption of a mortgage to which neither the petitioners nor the promoter was a party, so it did not bind them. The TDR or additional FSI claim is not a valid reason to refuse or delay conveyance. At best it is an ancillary issue that can be handled through conditions in the conveyance or by reserving the promoter's liberty to pursue the claim legally.

Why it matters for your society

If your society is registered, the four-month duty in section 11(1) and Rule 9 runs from your registration unless a different period was mutually agreed, and an open-ended clause making conveyance wait for later phases cannot postpone it. The court also treated the right as arising once the society is formed.

What your committee should do

1. 1Pass a general body resolution to seek conveyance, as these societies did on 17 March 2024.
2. 2Send the promoter a written notice demanding conveyance, as was done here on 19 March 2024.
3. 3If the promoter does not convey, apply to the Competent Authority under section 11(3) of the MOFA Act.
4. 4Keep the registered section 4 agreement and its schedule, and your society registration certificate. The court treated the registered section 4 agreement as fixing the promoter's obligation to convey the defined portion of land, and your registration date is what the four-month duty runs from.
5. 5Do not be deflected by phase clauses or stalled development. On this ruling they do not postpone the duty.
6. 6If there are several societies and an apex body, conveyance may be made to the apex body for convenience, but the court called that only a procedural option and not a legal precondition.
7. 7Expect the promoter's TDR, FSI and title points to survive and be argued separately.

Limits of this ruling

The decision is confined to the entitlement of the petitioners under section 11(3). A deemed conveyance does not decide ultimate title against third-party claims; it simply transfers whatever rights the promoter had to the society. The TDR and FSI claim was not decided on merits and is left to conditions in the conveyance or a separate legal claim. The proportionate shares of later societies were left to be worked out. The court also said the respondents may file an independent civil suit, and that the claim of excess area or proprietary interest is to be considered on its own merits without being influenced by observations in this judgment.

On the Association, paragraph 13 records the promoter's submission that its registration was cancelled by an order of the Divisional Joint Registrar dated 28 February 2025. A connected Writ Petition No. 4704 of 2025, heard together, challenges that and judgment in it was reserved. The court did not expressly answer the objection about the Association's standing and granted relief to the Association regardless. Do not read this ruling as deciding the validity of that registration.