‘Absence Of Occupation Certificate Doesn’t Bar Flat Buyers From Deemed Conveyance’: Bombay HC

The Bombay High Court has ruled that the absence of an Occupation Certificate (OC) does not impede the right of flat purchasers to obtain a certificate of deemed conveyance. The court emphasised that a promoter’s failure to fulfill statutory obligations cannot restrict the flat purchasers’ statutory right to conveyance of the promoter’s rights, title, and interest in the property. 

The HC passed the judgment while hearing a petition by ALJ Residency Co-operative Housing Society Ltd in Pali Naka in Bandra west, which had filed a petition challenging the District Deputy Registrar’s (DDR) order dated January 30, 2017 rejecting its application for deemed conveyance under the Maharashtra Ownership of Flats Act, 1963 (MOFA). The society alleged non-compliance by the developer, M/s Bhati Homes Pvt. Ltd., in conveying ownership rights as mandated under MOFA.

DDR rejected the society’s application for deemed conveyance on grounds of lack of an agreement for sale, incomplete commencement certificates, and alleged illegality of construction involving unauthorised floors. Additionally, pending litigation and discrepancies in CTS numbers were cited. 

The High Court noted that Section 11(3) of MOFA requires submission of registered agreements and relevant documents, including an OC “if any.” This implies that an OC is not mandatory for granting deemed conveyance. It further held that the Competent Authority’s failure to issue a defect notice (Form VIII) before rejecting the application rendered the rejection unsustainable. “Having issued notice to the opponents, it is implied that the application was complete in all respects,” Justice Sahrmila Deshmukh said on November 25. 

The court rejected the argument that granting deemed conveyance would legalize unauthorized construction. It clarified that deemed conveyance merely transfers the promoter’s title to flat purchasers, enabling the society to regularise or redevelop the structure, if permissible. “The grant of deemed conveyance does not impart lawfulness to the structure… The flat purchasers cannot be put to a disadvantage on account of the promoter’s default,” Justice Deshmukh added.

The court referred to a 2018 Government Resolution permitting societies without OCs to file a self-declaration and apply for OCs post-deemed conveyance. It criticised the promoters for resisting conveyance while failing in their obligation to secure approvals. “Acceptance of such a defense would amount to putting a premium on the promoter’s default,” the court emphasized. 

Quashing the 2017 rejection order, the court remitted the application to the Competent Authority with instructions to issue a deemed conveyance certificate subject to the society filing a self-declaration under the 2018 GR. It also permitted the society to proceed with redevelopment after obtaining deemed conveyance.