Case: M/S. Shree Siddharth Construction Builders and Developers Vs. Shree Saraswati Apartment Co-Operative Housing Society Limited &amp; Others

4) Briefly the facts leading to the present petition are as follows:a) The original owners of the said property by an agreement dated 12 November 1980 agreed to sell the said property save and except a tenanted chawl existing on the said property to respondent No.2.b) Consequent to the above agreement respondent No.2 as a Promoter under MOFA constructed a building comprising ground plus 6 floors in 1982 and sold flats therein by executing agreement under the MOFA with individual flat purchasers. Subsequently, the purchasers of the said flats formed aSociety i. e. respondent No.1.c) On 19 December 1986 the original owners of the said property executed a conveyance of the said property in favour of respondent No.2. This conveyance was of the said property save and except the tenanted chawls in terms of the agreement dated 12 November 1980 as modified and altered by subsequent agreements as recorded in the conveyance.d) Inrespondent No.2 constructed the second building of ground plus three floors on the said property. The respondent No.2 sold the flats therein by executing agreements of sale with individual flat purchasers under the MOFA. The purchasers of the flats in second building formed aHousing Society i.e. respondent No.3.e) The agreements of sale entered into by the promoter i.e. respondent No.2 with the buyers of the flats in respect of both the buildings viz. Respondent Nos. 1 and 3 were identical agreements under the MOFA. The above agreements of sale of flats in clause 16 thereof provides that a transfer of the said property to the society/company/institution as formed by the flat purchasers would simultaneously transfer an area of 1300 sq. yards to the original owner.f) On 29 December 2007 the original owner of the said property executed a conveyance in favour of the petitioner in respect of its entire residuary rights in the said property i.e. tenanted chawl subject to existing tenancies.g) On 29 February 2008, respondent No.2 executed a conveyance of the balance of its rights in the said property to the petitioner. The aforesaid agreement dated 29 February 2008 specifically provided that the petitioner entered into the shoes of the promoter i.e. respondent No.2 and would at all times do all things necessary to discharge the obligations of respondent No.2 qua various flat purchasers to whom flats in the two buildings of respondent No.1 and respondent No.3 have been sold.h) In view of the two conveyance deeds dated 29 December 2007 and 29 February 2008 the petitioner entered into the shoes of the the original owners and theNo.2.i) On 1 April 2011, the respondent No.1 made an application dated 28 March 2011 to respondent No.4 seeking a deemed conveyance of the right, title and interest of respondent No.2 in the land and the building standing on the said property. In support of its application for deemed conveyance the respondent No.1 relied upon various documents including the agreement for sale to the individual flat purchasers under the MOFA.k) In the proceeding before respondent No.4, the petitioner intervened in its own capacity and also as a power of attorney holder of respondent No.2. During the course of the proceeding respondent No.4 directed respondent No.3 also be made a party to the proceedings before him.l) After hearing all the interested parties, respondent No.4 by an order dated 26 March 2012 held that under Section 11(3) of MOFA, respondent No.1 and 3 are entitled to unilateral deemed conveyance in their favour of land. However, in the absence of demarcation of the land by the petitioner and its predecessor respondent No.2 being conveyed to Respondent Nos.1 and 3, the same was distributed between them on the basis of FSI consumed by each of them. The respondent No.4 held that the FSI permitted for both the buildings at the relevant time was one and the FSI consumed for building of respondent No.1 was 0.81 and for building of respondent No.3 was 0.80. Therefore, the entire land of 4568.70 sq. meters was used by respective societies in proportion to the FSI consumed by them. This was because the owner of the chawl was owner of the super structure only not entitled to ownership of land besides the land on which the structure was built. The distribution as made by respondent No.4 was asFSI of 2426.12 sq. meters used for Shree Saraswati Apartment i. e. respondent No.1 Society.(b) FSI of 705.39 sq. meters used for SaraswatiHousing Society i. e. respondent No.3 society.(c) Entire land of 4568.70 sq. meters is distributed in the ratio of 2426.12: 705.39 sq. meters between the two societies i.e. respondent Nos. 1 and 3.(d) The entitlement to land of 1029.13 sq. meters to respondent No.3 and 3539.58 sq. meters to Respondent No.1(e) Out of the above, 415.76 sq, meters to be given as lease to the petitioner herein (who was intervener before respondent No.4) on which the chawls stands.

Court's reasoning:
11) In view of the above there is no obligation on the part of theSociety to whom the deemed conveyance is being granted by respondent No.4 to convey 1300 sq. yards around the chawls in favour of the original owners and/or its successors i.e. the petitioner. It was in the aforesaid circumstances the view of respondent No.4 that there was no obligation on respondent Nos.1 and 3 to execute a lease in favour of the original owners with regard to 1300 sq. yards of land surrounding the existing chawl on the said property is neither arbitrary and/or perverse.12) In the light of the above discussion the respondent No.2 was under an obligation to convey the said property to respondent Nos. 1 and 3 societies in accordance with the agreement entered into with individual flat purchasers therein under Section 4 of MOFA. However, as the respondent No.2 failed to discharge its obligation, respondent No.1 was entitled to move respondent No.4 under Section 11 of the MOFA for deemed conveyance to enforce the obligation of the respondentunder MOFA to convey all rights, title and interest in the land and building in accordance with the agreement executed under Section 4 of MOFA. In the present facts, respondenthad executed identical agreements in respect of the flats sold in the building of respondent No.1 and flats sold in the building of respondent No.3. In fact while executing agreement for sale with flat purchasers in respondent No.3 Society respondent No.2 ought to have excluded an area from the said property which would be conveyed along with building to respondent No.1 society. However, the respondent No.2 Promoter did not do the same and undertook to convey to both respondent Nos. 1 and 3 Societies the said property admeasuring 4739.78 sq. mtrs. It was in these circumstances that respondent No.4 adopted the FSI distribution between the constructed properties existing on the said property so as to convey the said property to the claimants thereof in a reasonable manner. This distribution between the different claimants to the said property on the basis of FSI consumed became necessary only because respondent No.2 while entering into two agreements with the purchasers of premises in Shree Saraswati Apartment i.e. respondent No.1 in 1982 and the purchasers of premises in SaraswatiHousing Society i.e. respondent No.3 in 1992 had not allocated the land to be conveyed between the two buildings but had undertaken to convey the said property to both of them. In this view of the matter, it is not open to the petitioner (successor to respondentto take advantage of its own wrong and frustrate the rights of buyers of the flats under Section 4 of MOFA. In these circumstances, we find that the impugned order of respondent No.4 is reasonable and in accordance with law. Therefore, the impugned order calls for no interference on the above account.13) The petitioners next grievance is that the impugned order of respondent No.4 has ignored the fact that benefit of FSI was available to the petitioner having got into the shoes of the original owners and respondent No.2. So far as the original owners right to FSI is concerned, the agreement dated 11 November 1980 itself very clearly provides in clause 9 thereof that the original owners save and except retaining the chawl on the said property do not retain any FSI available in respect of the said property including the chawl and the right of FSI would be available only ifNo.2 shall give it to the original owner for consideration. The conveyance dated 19 December 1986 also conveyed to respondent No.2 the said property with its all rights, liberties and appurtenances to the use and benefit of respondent No.2. Therefore, even the rights in respect of the FSI of the original owners are concerned the same stands transferred to respondent No.2.14) So far as the petitioners acquisition of rights of respondent No.2 are concerned, the same has been acquired under conveyance dated 29 February 2008. However, the preamble to the aforesaid conveyance dated 29 February 2008 very clearly states that the rights being acquired by the petitioner under the aforesaid conveyance is subject to right already created by the original promoters in respect of the purchasers of the said flats under the MOFA. Consequently when the building and the land on which the buildings are constructed, it follows that the rights in the land and the buildings including the FSI and all future advantages and/or accrual of any further rights are also acquired by the two societies to whom the land is being conveyed. The agreement entered into by respondentwith the individual purchasers of the flats in respondent Nos. 2 anddoes not provide therein that respondent No.2 promoters would continue to have rights in respect of land even after the same is conveyed to Respondent Nos. 1 and 3 societies under the agreement with the buyers of the flats therein under Section 4 of MOFA. In the above view of the matter, it is not open to the petitioners to claim any right/entitlement with regard to FSI attributable to the said property. Therefore the above grievance of the petitioner is also notThe next grievance of the petitioner that the application made by respondent No.1 for deemed conveyance under Section 11 of the MOFA is premature inasmuch as the same should have been made by federal society consisting of respondent Nos. 1 and 3 collectively. This objection is misconceived in law. The two societies viz. Respondent Nos.1 and 3 cannot together form a federal society. This is so as a federal society would require at the minimum not less than five members all of whom are in turn themselves societies. This is so provided inof the MaharashtraSocieties Act, 1960. In the present case there are only two societies and both have been independently formed. Consequently even if they come together they cannot be classified as federal society. In any event, even if, the deemed conveyance is made in favour of two societies collectively, they would be entitled to aggregate 4568.70 sq. mtrs. and the petitioner would continue to be entitled to balance of 415.76 sq. mtrs. of the said property. The deemed conveyance being made either individually or collectively to the two societies does not in any manner cause any prejudice to the petitioner. It must be pointed out that there is no grievance before us by either respondent No.1 and/or respondent No.3 on that account. Thus, we see no merits in this grievance of the petitioner.