Bombay HC: Developer's insolvency cannot block society's deemed conveyance application

The Bombay High Court (Justice Sandeep V. Marne) has allowed a writ petition by Rose Villa Co-operative Housing Society Ltd., Mumbai, against the District Deputy Registrar and others. The order, reported on 31 October 2026, sets aside the Competent Authority's rejection of the society's application for unilateral deemed conveyance. The report gives 6 October 2026 as the date the petition was allowed.

What the dispute was about

Deemed conveyance is a process under Section 11(3) of the Maharashtra Ownership Flats Act, 1963 (MOFA) by which a society obtains title to its land and building when the developer does not execute the conveyance. The society's Application No. 8 of 2024 was rejected on 29 July 2024 because the developer was in Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, and because the developer claimed the right to build a seventh and eighth floor. The building stands up to the sixth floor, with an occupation certificate dated 7 September 2016.

What the Court held

• Pending CIRP does not by itself stop the Competent Authority from deciding a deemed conveyance application. The Court treated it as a statutory process of perfecting title, not a claim against the insolvent developer.
• The moratorium under Section 14 of the Insolvency and Bankruptcy Code covers only assets forming part of the developer's estate, and that has to be examined first rather than assumed.
• The Competent Authority may check prima facie whether members' consent exists, but cannot reject an application merely because consent letters were produced. The letters here were blanket consents, not informed consent to a disclosed proposal for floors seven and eight; their validity is for a civil court.
• Additional development potential that became available later under DCPR 2034 belongs to the society, once the flats were sold and the sanctioned potential used up.

The 2024 order was quashed and the matter sent back to the District Deputy Registrar, limited to issuing a unilateral deemed conveyance certificate, as expeditiously as possible and preferably within three months.

What this means for housing societies

• A developer's insolvency is not, on this ruling, an automatic reason to refuse or park a deemed conveyance application.
• Societies that hold developer-drafted blanket consent letters should know such letters may not be treated as proof of informed consent to extra floors.
• Applications should record clearly how the sanctioned built-up area was used up and what is claimed as remaining potential.

The report does not give the full judgment text or a writ number, so committees facing a similar rejection should read the order itself or consult a lawyer before relying on it. The ruling is by a single judge, so its effect on other benches is not stated.