Bombay HC: Developers Cannot Delay Deemed Conveyance Citing Future TDR

Justice Sandeep Marne of the Bombay High Court, in an order dated June 18, partly allowed a petition by Kiran Builders Pvt Ltd and directed the competent authority to issue a fresh unilateral deemed conveyance certificate in favour of Kalpita Enclave Co-operative Housing Society Ltd and two other societies in Vile Parle. The certificate covers 16,584.55 square metres of land and must be issued within three months.

What the court held

The developer had challenged a 2017 order granting deemed conveyance of the full 21,736 square metre plot, arguing it still intended to construct additional buildings and could claim compensation or Transferable Development Rights (TDR) for portions of the land in future. The court rejected this, holding that a developer cannot hold onto society land indefinitely while continuing to exploit its development potential. "Developer cannot claim that he can continuously exploit the building potential for eternity without conveying the land in favour of the Society," Justice Marne observed. The court clarified that developers retain the separate right to claim TDR or compensation from authorities for land reserved for public purposes, but that right does not justify withholding conveyance from flat owners.

What this means for housing societies

• Societies awaiting deemed conveyance under the Maharashtra Ownership of Flats Act (MOFA) can cite this ruling if a developer resists on the ground of unused or future development potential.
• A society may withdraw a pending conveyance suit and instead apply for deemed conveyance, which the court described as a quicker statutory remedy.
• Land reserved for public purposes such as roads, markets, or schools, or affected by encroachments, can be excluded from the conveyance area even as the remaining land is transferred.
• Committees pursuing conveyance should be prepared for authorities to recompute the exact land area based on such exclusions, rather than assume the entire original plot will transfer automatically.

The court set aside the 2017 conveyance certificate and remanded the matter for a fresh certificate limited to the reduced area, directing the parties to appear before the competent authority on June 24. Societies with stalled conveyance applications may find this ruling useful in pushing back against similar delay tactics by developers.