A society was denied its land because the developer was in insolvency and wanted two more floors; both grounds fail
Justice Sandeep V. Marne set aside the Competent Authority's refusal and remanded the application with a direction to issue the deemed conveyance certificate.
Deemed conveyance exists because developers do not always hand over the land under a building to the society of the people who bought the flats in it. Here the Competent Authority refused a society's application for two reasons: the developer was going through a corporate insolvency resolution process, and it said it was entitled to build a seventh and eighth floor on the building. On 6 October 2026 the Bombay High Court held that neither ground survives, and sent the application back with a direction to issue the certificate.
How the building came to be
The plot at Village Ambivali in Andheri was purchased by the developer in December 2009. On it stood an existing structure called Rose Villa, of a ground floor and six upper floors. The developer decided to demolish the old building and put up a new one, and submitted plans in December 2013. An intimation of disapproval was received for plans for a building of four floors, a commencement certificate followed from the Municipal Corporation of Greater Mumbai in May 2014, and the plans were revised and sanctioned again in January 2015.
The society applied to the District Deputy Registrar of Co-operative Societies, as Competent Authority, for a certificate of unilateral deemed conveyance in respect of the land and the building. By an order of 29 July 2024 the application was rejected.
How the land stayed with the developer
Construction was completed and a full occupation certificate issued in September 2016, after which the developer began selling flats. The agreements with purchasers recognised the developer's right to use transferable development rights for a vertical addition to the building, and its right to receive setback compensation. The developer says it obtained individual no-objection certificates from each flat purchaser for extending the building vertically, relying on a notification of November 2016 on the use of transferable development rights, and in 2020 it secured approval for a seventh and eighth floor on payment of premium towards consumable floor space index.
In parallel, insolvency overtook it. The National Company Law Tribunal initiated a corporate insolvency resolution process by an order of 27 January 2020, imposing a moratorium and suspending the board of directors, and a resolution professional was appointed in June 2020. A commencement certificate for construction up to the eighth floor was issued in July 2020, and a further certificate for the two additional floors in April 2022, revalidated in April 2024.
The society was registered only in November 2022, and the developer's challenge to that registration was repelled by the High Court in February 2024. In January 2024 the society applied to the Competent Authority under Section 11(3) of the Maharashtra Ownership Flats Act for deemed conveyance. The resolution professional appeared for the promoter and opposed it, relying on the no-objection certificates from individual purchasers.
What the society argued
For the society it was argued that the Competent Authority had wrongly rejected the application because of the pendency of the insolvency process, and reliance was placed on Darshan Mandir Co-operative Housing Society Limited v. District Deputy Registrar, Co-operative Societies, in which this Court held that the mere initiation of a resolution process against a promoter does not suspend or extinguish the society's right to secure conveyance of the land and the building.
On the second ground it was argued that the developer has fully exhausted the entire development potential sanctioned by the planning authority, and that the no-objection certificates relied on are blanket consents with no existence in the eyes of law.
Insolvency is not an answer
The Court declined to go into the details of the insolvency proceedings against the developer. What mattered for the application before it was narrower: whether the pendency of those proceedings, and the developer's asserted entitlement to build further floors, justified withholding from the society the land its members had paid for.
On the second ground the Court was direct. The developer is not entitled in law to put up additional construction in the building, and it has in any event disabled itself for a considerable period from acting on the revised development permissions it obtained from the municipal corporation.
The permissions that should never have been sought
The reasoning then turns back on itself in a way that is the heart of the judgment. The revised development permissions were sanctioned by the municipal corporation only because conveyance of the land to the society had been unlawfully denied by the developer. Had the society been formed in time and the conveyance effected in time, the society would have been the owner of the land, and there would have been no question of the corporation entertaining any application by the developer to revise the development plan at all.
In other words, the developer's claim to additional floors rests on a position it occupies only because of its own default. The Court held both grounds on which the Competent Authority rejected the application to be unsustainable, and the order of 29 July 2024 indefensible.
Order
The order of 29 July 2024 passed by the Competent Authority was set aside. The society's application was remanded to the Competent Authority for the limited purpose of issuing a certificate of unilateral deemed conveyance in respect of the land and the building in favour of the society. The parties were directed to appear before the Competent Authority on 12 October 2026 with a copy of the order downloaded from the Court's website, and the Competent Authority was directed to decide the remanded proceedings and issue the certificate as expeditiously as possible, preferably within three months. The writ petition was allowed, rule made absolute, with no order as to costs.