Bombay HC Sets Aside Deemed Conveyance Granted on Second Application Filed Without Challenging Earlier Rejection
Justice Farhan Dubash held that a housing society cannot bypass a final rejection order by filing a second deemed conveyance application before the same Competent Authority under MOFA, finding the second application barred by principles analogous to res judicata and the authority's lack of any review power.
The Bombay High Court has set aside a deemed conveyance order granted in favour of Apeksha Co-operative Housing Society Ltd. under Section 11 of the Maharashtra Ownership of Flats Act, 1963 (MOFA), along with the registered unilateral deed of conveyance that followed. Justice Farhan P. Dubash, sitting singly in the Ordinary Original Civil Jurisdiction, allowed Writ Petition No. 2453 of 2018 filed by B. K. Corporation, the promoter and developer of the layout. The central finding is that the Competent Authority and Deputy Registrar of Co-operative Societies acted without jurisdiction when it entertained a second deemed conveyance application from Apeksha CHSL while an earlier rejection order — which had never been challenged — remained operative and its conditions unsatisfied.
The Layout, the Societies, and the Conveyance Dispute
B. K. Corporation developed a single layout at Survey No. 41, Sundervan Complex, Lokhandwala Road, Andheri (West), Mumbai, admeasuring about 10,130.56 sq. mtrs. Plot “B” within the layout, admeasuring about 8,259 sq. mtrs., carries four buildings: Apeksha, Noble House, Valencia, and Camron Heights. Each building has a corresponding registered co-operative housing society. The petitioner is the promoter of all four buildings.
Between 1989 and 2009, the four buildings were constructed in stages. Apeksha and Noble House were built between 1989 and 1993, with occupancy certificates issued in October 1996 and March 1997 respectively, and both societies registered in 1999. Valencia and Camron Heights followed, with their societies registered in 2004 and 2009.
MOFA was amended with effect from 25 February 2008 to provide for unilateral deemed conveyance. The amendment created the office of the Competent Authority under Section 2(a) read with Section 5A and empowered it under Section 11 to issue a certificate of deemed conveyance where a promoter fails to execute conveyance within the prescribed period.
In October 2010, the petitioner proposed a common conveyance in favour of all four societies jointly. Noble House CHSL demanded an independent conveyance in December 2010. The petitioner declined. In June 2012, Noble House CHSL filed Suit No. 1481 of 2012 before the Bombay City Civil Court at Dindoshi, seeking conveyance of the exempted land admeasuring 4,792 sq. mtrs. forming part of Survey No. 41, along with ancillary reliefs. Ad-interim reliefs were refused in November 2012. A challenge to that refusal was also dismissed by the High Court. The suit has remained pending ever since.
The First Application and the Conditional Rejection
On 2 January 2016, Apeksha CHSL filed its first deemed conveyance application (Application No. 2 of 2016) before the Competent Authority. The petitioner and the other three societies opposed it. By an order dated 4 August 2016, the Competent Authority rejected the application. It held that, given the pendency of Suit No. 1481 of 2012 concerning conveyance rights over the same layout, it would not be correct to allow the application at that stage. The authority granted liberty to Apeksha CHSL to file a fresh application after the decision of the civil suit.
That order was never challenged. The civil suit continued to remain pending.
The Second Application and the Impugned Order
On 3 January 2017, Apeksha CHSL filed a second application (Application No. 2 of 2017). It contended that the earlier order had been passed without the Competent Authority being told that the ad-interim reliefs in the civil suit had been refused, and that Section 10 of the CPC was inapplicable since Apeksha CHSL was not the plaintiff in that suit. The petitioner and Noble House CHSL both opposed the second application. Noble House CHSL specifically raised res judicata in its reply dated 12 February 2017, pointing out that no new facts had arisen and that the civil suit remained pending.
The Competent Authority passed the impugned order on 31 May 2017, granting deemed conveyance in favour of Apeksha CHSL in respect of land admeasuring 1,740.97 sq. mtrs., including 1,384.65 sq. mtrs. stated to be in its physical possession, together with the Apeksha building and proportionate rights in common amenities.
The petitioner filed the present writ petition on 6 November 2017. During its pendency, the Competent Authority executed a unilateral Deemed Conveyance Deed dated 12 January 2018, registered on 16 April 2018 under Registration No. BDR-4/421/2018. By an interim order dated 23 April 2018, the High Court directed cancellation of the registration and directed that all deemed conveyance applications concerning the common layout would remain subject to the outcome of the writ petition. Apeksha CHSL challenged that interim order before the Supreme Court in SLP (Civil) No. 12294 of 2018. The Supreme Court stayed certain directions on 18 May 2018 while clarifying that the registration would remain subject to final adjudication. On 12 April 2019, the Supreme Court dismissed the SLP and directed continuation of the interim protection till final disposal of the writ petition.
Three Legal Questions Before the Court
Justice Dubash identified three inter-connected questions: whether the second application dated 3 January 2017 was maintainable in light of the earlier order dated 4 August 2016; whether the impugned order amounted to an impermissible exercise of review jurisdiction; and whether the grant of deemed conveyance suffered from jurisdictional or procedural infirmity warranting interference under Article 226 of the Constitution of India.
The petitioner argued that the second application was, in substance, an attempt to review or recall the earlier order, and that MOFA confers no power of review on the Competent Authority. Reliance was placed on Kashish Park Reality Pvt. Ltd. & Anr. vs. State of Maharashtra & Another (2021 (3) Mh.L.J. 778) and M/s Aakanksha Construction Co. vs. State of Maharashtra & Another. The petitioner also argued that the second application was barred by res judicata, relying on the Supreme Court's decision in Faime Makers Private Limited vs. District Deputy Registrar, Co-operative Societies (3) Mumbai & Others ((2025) 5 SCC 772) and this Court's decision in Magnum Unit 'A' CHS Limited vs. State of Maharashtra. It was further submitted that the impugned order failed entirely to deal with the jurisdictional objection raised by both the petitioner and Noble House CHSL.
Apeksha CHSL countered that the petitioner had not raised res judicata before the Competent Authority and had introduced it only by amendment in January 2026, amounting to waiver. It also argued that the earlier order proceeded on an erroneous understanding of law, that an erroneous decision cannot perpetuate illegality through res judicata, and that the second application was a fresh invocation of statutory jurisdiction on complete facts. On merits, it submitted that the land area granted was consistent with the Government Resolution dated 22 June 2018 on apportionment of land in multi-building layouts. It also argued that once a unilateral conveyance has been executed and registered, the court ought not ordinarily to interfere in writ jurisdiction.
How the Court Reasoned
Justice Dubash began with the character of the order dated 4 August 2016. The Competent Authority had not merely disposed of the application but had expressly attached a condition: a fresh application could be filed only after disposal of the civil suit. The liberty was therefore conditional, not absolute. That order was never challenged and attained finality between the parties.
The court held that once an adjudicatory authority renders a reasoned decision and attaches a specific condition governing future recourse, the parties are bound by that determination unless it is set aside by a superior forum. This binding character flows not merely from the technical doctrine of res judicata but from the broader principle of finality of judicial and quasi-judicial decisions, which applies equally to statutory authorities exercising adjudicatory powers.
On Apeksha CHSL's argument that an erroneous order cannot operate as res judicata, the court was direct: an order alleged to be legally incorrect does not become non-existent. So long as it remains operative, it binds the parties. The remedy was to challenge the order dated 4 August 2016 before the appropriate forum. Having elected not to do so, Apeksha CHSL could not indirectly nullify it by initiating a second round of proceedings before the same authority.
The court drew on the Supreme Court's decision in Faime Makers, which held that the principle of res judicata applies to and binds quasi-judicial authorities, that the characteristic attribute of a judicial act is that it binds whether right or wrong, and that any quasi-judicial authority would not ordinarily have the power to take a contrary view to that of a coordinate or predecessor authority. It also applied the ratio of Yadaiah & Another vs. State of Telangana & Others ((2023) 10 SCC 755), which holds that re-agitation of concluded questions is impermissible except where the earlier order is vitiated by lack of jurisdiction, fraud, or has been duly set aside by a superior forum.
On the three exceptions to res judicata identified in Canara Bank vs. N. G. Subbaraya Setty and Another ((2018) 16 SCC 228) — jurisdiction, erroneous rejection of a statutory prohibition, and a different issue of law — the court held that none applied. The order dated 4 August 2016 neither decided an issue of law nor erroneously rejected a statutory prohibition, and there was no change in the issue of law between the two proceedings.
Applying the principles from Magnum, the court found that the parties, the subject matter, and the foundational factual situation were identical in both applications. The civil suit remained pending. The grounds urged in the second application — that certain orders in the civil proceedings had not been placed before the authority earlier, and that Section 10 of the CPC was inapplicable — were not new circumstances. They were arguments directed against the correctness of the earlier order. In substance, Apeksha CHSL sought reconsideration of the very issue already decided, namely, whether deemed conveyance could be granted during the pendency of the civil suit. That squarely fell within the domain of review.
On the absence of review power, the court held that neither Section 11 of MOFA nor any allied provision confers review jurisdiction on the Competent Authority. Upon passing an adjudicatory order, the authority becomes functus officio and cannot reopen the matter merely because another view is possible, additional submissions are advanced, or the earlier determination is alleged to be erroneous on merits. Reconsideration is confined to exceptional situations such as absence of jurisdiction, fraud, or an error apparent on the face of the record affecting the authority's competence. None of those situations existed here.
The court also rejected the argument that the petitioner had waived the res judicata plea by not raising it before the Competent Authority. The record showed that the petitioner had raised the bar under Section 10 of the CPC and Noble House CHSL had specifically raised res judicata under Section 11 of the CPC. The issue squarely arose for determination. The Competent Authority, however, returned no finding on it whatsoever. That failure to address a jurisdictional objection itself vitiated the decision-making process.
The court distinguished the proposition that mere pendency of a civil suit does not ordinarily bar deemed conveyance proceedings. The issue here was not whether pendency of a civil suit in law bars deemed conveyance. The question was whether the Competent Authority, having earlier chosen to defer adjudication until the suit was decided, could subsequently ignore its own binding determination. The legality of the earlier reasoning was no longer open to examination before the same authority. Until the first order was set aside, the Competent Authority remained bound by its own earlier decision.
On the argument that the court should not interfere because a conveyance had already been executed and registered, the court held that registration of a deed flowing from an order passed without jurisdiction does not create an irreversible situation. Where the decision-making process itself is fundamentally flawed, exercise of writ jurisdiction is not only permissible but necessary to preserve statutory discipline. The decisions in Satya Pal Anand vs. State of Madhya Pradesh ((2016) 10 SCC 767) and Amudhavali vs. P. Rukumani ((2022) 17 SCC 534) were distinguished on facts.
Having found the second application not maintainable, the court held it unnecessary to examine the rival submissions on apportionment of land under the Government Resolution dated 22 June 2018 or the alleged discrepancies between the certificate under Section 11(4) of MOFA and the registered deed. Once the foundational jurisdiction to entertain the second application failed, all consequential actions — the certificate under Section 11(4) and the unilateral deed of conveyance — could not survive independently.
The court acknowledged that it was “at pains to set aside an order granting deemed conveyance in favour of an association formed by home buyers.” It noted that MOFA is beneficial legislation enacted to prevent promoters from deliberately withholding conveyance, and that courts have always been slow to interfere with deemed conveyance orders in favour of co-operative housing societies. However, it held that the Competent Authority is a tribunal of limited jurisdiction and must exercise its powers within statutory bounds. Complicated issues raised by promoters or, as in this case, by another society in the same layout, can be left to civil courts.
On the question of remedy for Apeksha CHSL, the court noted that Suit No. 1481 of 2012 had remained pending for almost 15 years. If liberty were not granted to Apeksha CHSL to challenge the order dated 4 August 2016, it would be rendered remediless in respect of its statutory right of conveyance. The court therefore granted Apeksha CHSL liberty to challenge the earlier order dated 4 August 2016 before the appropriate forum, with all rights and contentions on merits kept open.
Order
The writ petition was allowed. The impugned order dated 31 May 2017 passed by the Competent Authority was set aside. The Deed of Unilateral Deemed Conveyance dated 12 January 2018, registered on 16 April 2018 under Registration No. BDR-4/421/2018, was cancelled and set aside. The authorities were directed to take necessary steps to give effect to the cancellation.
The court directed that the order shall not affect the rights and contentions of the parties in the pending Suit No. 1481 of 2012. The City Civil Court was directed to hear and decide that suit uninfluenced by this order, as expeditiously as possible and preferably within one year from the date of the judgment.
Apeksha CHSL was granted liberty to challenge the earlier order dated 4 August 2016 passed in Application No. 2 of 2016, with any such challenge to be decided on its own merits. No order as to costs was made.
After pronouncement, Apeksha CHSL's counsel sought a stay. The court granted a stay of the judgment for four weeks from 9 June 2026, till 7 July 2026, to enable Apeksha CHSL to challenge the judgment.