Deemed conveyance can be executed in favour of housing societies despite pending civil suit: HC

On February 6, the single judge bench of Justice C V Bhadang passed the order while hearing a petition filed by one Subhash Navare, who claimed that he had entered into an agreement with builders Premji Rambia and others to develop their property in 1979. (Representational Image)

IN A ruling that may give relief to housing societies, the Bombay High Court recently held that societies that have not yet been transferred to its owners by the builder can apply and get deemed conveyance, even if the property was involved in litigation.

The court, however, held that the deemed conveyance — the ownership right of the plot on which houses are built — will be valid until the decision of a competent civil court and its status will be based on the outcome of the litigation between the property owner and the builder.

Within four months of completion of the project, the developer is required to transfer the land and building to either the society or a legal body of flat purchasers through deemed conveyance. The competent authority under Maharashtra Ownership Flats Act thereafter executes it in favour of the society.

On February 6, the single judge bench of Justice C V Bhadang passed the order while hearing a petition filed by one Subhash Navare, who claimed that he had entered into an agreement with builders Premji Rambia and others to develop their property in 1979.

Advocate K K Malpathak, appearing for Navare, informed the court that as per agreement, the builder was to hand over seven flats to them. However, the developer failed to honour the agreement and transferred the flats in the name of the society.

Navare filed a civil suit seeking directions from the court to the developer to enforce the agreement. Claiming that as there was a dispute between the owners and the developers of the society, which was registered in 1993, Navare said it was not possible to apply for deemed conveyance from the competent authority. He also argued that the competent authority, which eventually granted deemed conveyance in May 2013, should consider the application afresh.

However, the society submitted that Navare and other owners had not taken any steps to enforce the 1979 agreement until it applied for execution of deemed conveyance and therefore, the challenge should not be allowed.

After hearing submissions and referring to past judgments, Justice Bhadang held that the order directing execution of deemed conveyance does not conclude the right, title and interest of the parties and aggrieved owners can always seek remedy before the civil court.

“Needless to mention that the execution of the deemed conveyance on the basis of the certificate granted by the competent authority will be subject to the outcome of the civil suit,” he added. At the request of the owners, the court directed the competent authority not to execute and register the deemed conveyance for six weeks.