By Legal Cell
**Case Name**: Ravi Jagganath Agarwal vs Prince Tower Co-operative Housing Society Limited and Others
**Court**: Bombay High Court, Single Judge (Sandeep Marne J)
**Judgment Reserved**: March 26, 2024
**Judgment Pronounced**: April 8, 2024
**Background:**
The case involves a tenanted structure originally owned by Mr. Manilal Maneklal Parekh, subsequently transferred to M/s. Chandrakant & Co., and then sold to M/s. Prince Enterprises for redevelopment. The Petitioner, Ravi Jagganath Agarwal, contests an order granting unilateral deemed conveyance of the land to Respondent No.1 – Society. The Petitioner acquired the land through a public auction and argued that transferring it to the Society would undermine the purpose of the auction purchase. Additionally, the Society has initiated a civil suit to declare the auction sale void and raised concerns about legal proceedings to evict occupants per the Maharashtra Rent Control Act.
**Covenants in Agreements with Flat Purchasers and Tenants:**
The Court reviewed two types of agreements:
1. Agreements with erstwhile tenants for granting ownership units.
2. Agreements with new flat purchasers.
Both agreements contained covenants where the promoter undertook to convey his rights, title, and interest in the land and building to the co-operative society formed by the flat purchasers.
**Petitioner’s Due Diligence:**
The Court emphasized that the Petitioner should have verified whether the promoter was obligated to transfer their rights to the Society before purchasing the property at the MCGM auction. The Petitioner knowingly took a risk by acquiring the promoter’s rights for Rs. 6,82,500, significantly lower than what one flat purchaser paid for a flat in 1990. The Court stated that this purchase does not extinguish the statutory rights of flat purchasers under Section 11(1) of MOFA.
**Illustration by the Court:**
The Court explained that if a promoter sells individual flats but fails to transfer the land to the Society and subsequently sells their rights to a third party, it does not extinguish the flat purchasers’ rights under Section 11 of MOFA. In this case, the sale through an MCGM auction does not impact the flat purchasers’ rights to seek unilateral deemed conveyance.
**Obligations Under Section 11(1) of MOFA:**
The Court stated that the Petitioner not only purchased the right, title, and interest in the land and building but also the obligation under Section 11(1) of MOFA. The Petitioner risked purchasing the property under the assumption that they could either recover possession from tenants or enjoy rights over any excess land. However, no land remains for the Petitioner after issuing a certificate of unilateral deemed conveyance.
**Non-Registration of Agreements:**
The Competent Authority directed all flat purchasers to pay stamp duty for their agreements, despite the original promoter’s absence hindering registration. Section 4A of MOFA allows unregistered agreements as evidence in lawsuits for specific performance, thus overriding the Registration Act. The Court stated that non-registration does not bar the Society from seeking unilateral deemed conveyance.
**Government Resolution of June 22, 2018:**
The Court noted the Government Resolution dated June 22, 2018, which provides guidelines for deciding applications for unilateral deemed conveyance. It allows recovery of unpaid stamp duty at the time of registering the deed of deemed conveyance. Non-registration of agreements is not an impediment to entertaining applications for deemed conveyance, as these defects are curable for passing orders and registering deeds of unilateral deemed conveyance.
**Judgment:**
The Writ Petition was dismissed.