Authority: High Court of Judicature at Bombay, Civil Appellate Jurisdiction

Order Date: 06 October 2026 (Pronounced); Reserved on 22 September 2026

Case Overview

  • Parties: Rose Villa Co‑operative Housing Society Limited (Petitioner) vs. 1) District Deputy Registrar Co‑operative Societies Mumbai City (3) (Respondent No.1/State), 2) Can Enterprises Private Limited (Respondent No.2/Developer), 3) Naresh Shah (Respondent No.3). Counsel for petitioner: Mr. Shreepad Murthy & Mr. Abhishek Patil; counsel for Respondent No.2: Mr. Amrut Joshi with Ms. Rucha Jog & Ms. Hemali Dhande; AGP for Respondent No.1: Ms. Savina R. Crasto.
  • Background of the Property: Plot bearing CTS No. 725/A, Survey No. 68, Hissa No. 1 (part), Survey No. 128 (part) and 69A (part) in Village Ambivali, Taluka Andheri, Mumbai Suburban District. Purchased by Can Enterprises on 8 December 2009. Existing structure “Rose Villa” (ground + six upper floors) was demolished; new building plans submitted on 9 December 2013. An Intimation of Disapproval (IOD) was issued for four‑floor plans; a Commencement Certificate dated 31 May 2014 was later issued. Revised plans up to the sixth floor were sanctioned on 30 January 2015 and a revised Commencement Certificate dated 23 February 2015 was issued. Full construction up to six floors was completed and an Occupancy Certificate (OC) was obtained on 7 September 2016.
  • Flat Sales: Majority of flats sold during 2016‑17. One flat sold on 5 June 2018 and another on 20 February 2020. Sale agreements were executed under Section 4 of the Maharashtra Ownership Flats Act (MOFA) and contained covenants reserving the developer’s right to use additional FSI/TDR and to obtain setback compensation.
  • CIRP Proceedings: Corporate Insolvency Resolution Process (CIRP) initiated against Can Enterprises. NCLT order dated 27 January 2020 imposed a moratorium and suspended the board. A Resolution Professional was appointed on 9 June 2020. Subsequent municipal approvals: Commencement Certificate for 7th & 8th floors on 8 July 2020; another commencement certificate for the two additional floors on 30 April 2022.
  • Petitioner’s Application: On 2 January 2024 the society filed Application No. 8/2024 before the Competent Authority seeking unilateral deemed conveyance under Section 11(3) of MOFA. The Resolution Professional opposed, relying on the flat‑purchasers’ NOCs. The Competent Authority re‑validated the vertical‑extension certificate on 24 April 2024 and dismissed the application on 29 July 2024, citing (i) pendency of CIRP and (ii) the developer’s alleged entitlement to construct 7th and 8th floors.
  • Contentions:

Petitioner’s counsel (Mr. Murthy) argued that CIRP does not suspend the statutory duty to convey land (citing Darshan Mandir Co‑operative Housing Society Ltd. v. District Deputy Registrar). He also contended that the NOCs are blanket consents lacking disclosure and therefore ineffective (citing Dosti Corp. v. Sea Flama Co‑operative Housing Society, Ariisto Realtors Pvt. Ltd. v. District Deputy Registrar, Santoshkumar Motilal Bhansali v. Competent Authority).

Respondent No.2’s counsel (Mr. Joshi) maintained that the Competent Authority was correct to reject the application because of the CIRP (citing Vishnoo Mittal v. Shakti Trading Co.) and that valid NOCs existed, permitting vertical extension.

  • Judicial Reasoning:

1. The Court reiterated the ratio of Darshan Mandir and Santoshkumar Motilal Bhansali: statutory duties under MOFA continue despite insolvency; the developer’s title in the land is deemed divested once all flats are sold and a society is formed.

2. The Court examined the nature of the consent letters. Most were executed before any approved plan for the 7th/8th floor existed (only 7 of 24 flats had consents after the alleged plan approval on 8 November 2017). The letters referred only to “approved plans” and to future notifications (e.g., DCPR 2034) without disclosing specific floor numbers, BUA or layout, rendering them blanket consents, which are unenforceable under Dosti Corp., Eternia CHSL, and Rajkumar Gulati precedents.

3. The Court held that the Competent Authority may conduct a prima‑facie enquiry into the existence of consent but need not assess its validity. Given the lack of proper disclosure, the consent letters could not be treated as valid under Section 7 of MOFA.

4. The Court observed that the additional development potential created by DCPR 2034 belongs to the society once the original building is completed and the land is conveyed; the developer cannot claim it.

5. The Court rejected the argument that the CIRP created a legal disability for the society, noting that the society was registered on 10 November 2022, after the moratorium, and that the statutory obligation to convey land arises irrespective of the insolvency moratorium.

  • Final Outcome
  • The order dated 29 July 2024 passed by the Competent Authority is set aside.
  • Application No. 8/2024 is remanded to the Competent Authority for the limited purpose of issuing a certificate of unilateral deemed conveyance in favour of Rose Villa Co‑operative Housing Society Limited.
  • Parties must appear before the Competent Authority on 12 October 2026.
  • The Competent Authority is directed to decide the remanded proceedings and issue the certificate within three months of the hearing.
  • The writ petition is allowed and the rule is made absolute; no order as to costs.

Topics: Deemed Conveyance, Insolvency Impact on Real‑Estate Development