Supreme Court of India

DEEMED CONVEYANCE COMPARATIVE STUDIES LEASE VS FREEHOLD : DEEMED CONVEYANCE.

Paramanand Builders LLP v. Competent Authority & District Deputy Registrar, Co-operative Societies, Mumbai City (4) & Ors. Writ Petition No. 1673 of 2022 with connected petitionsBombay High Court, decided on 24 February 20262026: BHC-AS:9299 INTRODUCTION The judgment of the Bombay High Court in Paramanand Builders LLP v. Competent Authority & District Deputy Registrar, Co-operative Societies, Mumbai City (4) & Ors., Writ Petition No. 1673 of 2022, principally concerns the scope of deemed conveyance under Section 11 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (“MOFA”), particularly where the promoter contends that the society is entitled only to leasehold rights and not to ownership of the land. The judgment was delivered by Justice Amit Borkar on 24 February 2026. The central proposition emerging from the judgment is that the nature and extent of the conveyance must be determined by identifying the actual legally subsisting right, title and interest of the promoter, rather than merely by relying upon contractual provisions which contemplate a lease or otherwise purport to restrict the statutory conveyance. At the same time, the judgment must be read together with the Supreme Court’s subsequent/parallel exposition in Arunkumar H. Shah HUF v. Avon Arcade Premises Co-operative Society Ltd., 2025 INSC 524, which establishes an important limitation: proceedings before the Competent Authority under Section 11 are summary and cannot conclusively adjudicate disputed questions of title. An aggrieved party remains entitled to approach the civil court. A. QUESTIONS OF LAW The principal legal questions may be formulated as follows: What is the extent of the society’s entitlement under Section 11 of MOFA? Does the society receive the promoter’s entire right, title and interest, or can the promoter restrict the conveyance to leasehold rights by relying upon agreements executed with flat purchasers? Where a promoter claims to be a lessee, what is the consequence if no legally effective lease was actually created? Can contractual terms requiring execution of a lease override the statutory obligation under Section 11? What is the scope of the Competent Authority’s jurisdiction in determining the nature of the promoter’s interest? What is the precedential value of an earlier deemed-conveyance order concerning another society in the same larger property, particularly the Mahavir Co-operative Housing Society case?  B. STATUTORY SCHEME Section 11 of MOFA is the statutory mechanism by which the organisation/society of flat purchasers obtains conveyance of the promoter’s interest in the land and building. The statutory expression of greatest significance is: “right, title and interest” The provision is remedial. Its object is to prevent a promoter from indefinitely retaining the title to land after having sold flats and received consideration from flat purchasers. The statutory scheme therefore proceeds on the following basis: Promoter’s obligation to convey↓Failure/refusal to execute conveyance↓Society invokes Section 11↓Competent Authority conducts statutory enquiry↓Certificate of deemed conveyance↓Registration However, the Supreme Court has clarified that the Section 11 proceeding is summary, and that the Competent Authority cannot finally determine complicated questions of title. C.RATIO OF PARAMANAND BUILDERS The judgment may be reduced to the following core ratio: The society is entitled to receive the promoter’s entire legally subsisting […]