The Bombay High Court has clarified that Section 11(3) of the Maharashtra Ownership Flats Act, 1963, cannot be invoked to enforce private agreements between individual flat purchasers. The Court set aside an order passed by the District Deputy Registrar, holding that the Competent Authority lacked jurisdiction to direct execution of a deed of apartment where the promoter was not a party and the agreement was not registered under Section 4 of MOFA.
The Verdict
The petitioner won. The Bombay High Court held that Section 11(3) of the Maharashtra Ownership Flats Act, 1963, applies only when a promoter fails to convey title to a society or association of flat purchasers, not to enforce private agreements between individual purchasers. The impugned order was set aside as ultra vires, with the Court clarifying that the respondent may pursue civil remedies but not under MOFA Section 11(3).
Background & Facts
The petitioner, a flat purchaser, challenged an order passed by the District Deputy Registrar under Section 11(3) of MOFA, directing him to execute a deed of apartment in favor of respondent No. 2, another flat purchaser. The dispute arose from a private arrangement between the two parties, unrelated to the original promoter or developer. The agreement in question was not signed by the promoter, was not registered under Section 4 of MOFA, and did not create any obligation on the promoter to convey title. The Competent Authority, however, assumed jurisdiction under Section 11(3), which permits the authority to direct a promoter to execute conveyance deeds upon failure to do so. The petitioner argued that since the promoter was not a party to the dispute and the agreement was purely inter se between two purchasers, the statutory mechanism under MOFA was inapplicable. The matter reached the High Court via a writ petition under Article 226 of the Constitution, following the dismissal of the petitioner’s objections before the Competent Authority.
The Legal Issue
The central question was whether Section 11(3) of the Maharashtra Ownership Flats Act, 1963, empowers the Competent Authority to enforce private agreements between individual flat purchasers, even in the absence of the promoter as a party and without a registered agreement under Section 4.
Arguments Presented
For the Petitioner
The petitioner contended that Section 11(3) is a remedial provision designed to protect flat purchasers from promoter default, not to resolve private disputes. He relied on the statutory scheme of MOFA, which defines the promoter’s obligations under Section 4 and vests jurisdiction in the Competent Authority only when such obligations are breached. He emphasized that the agreement between the parties was not an agreement for sale under Section 4, lacked promoter consent, and was unregistered, rendering it legally irrelevant under MOFA. He cited the legislative intent behind MOFA - to regulate promoter-purchaser relationships - and argued that extending Section 11(3) to private contracts would distort its purpose.
For the Respondent
Respondent No. 2 argued that the agreement, though private, created enforceable rights over the flat and that Section 11(3) should be interpreted broadly to ensure justice. He contended that the Competent Authority, as a specialized forum, was best suited to resolve property disputes involving flats. He did not dispute the absence of the promoter but asserted that the statutory mechanism should be available to enforce any agreement relating to flat ownership, regardless of its origin.
The Court's Analysis
The Court undertook a strict textual and contextual analysis of MOFA. It observed that Section 11(3) is triggered only when a promoter fails to execute a conveyance deed in favor of the society or association of flat purchasers. The provision is not a general enforcement mechanism for all agreements concerning flats. The Court noted that the legislature deliberately confined the scope of Section 11 to promoter-related defaults, as evidenced by the definitions in Section 2 and the procedural requirements under Section 4.
"The scheme of MOFA shows that Section 11 applies when a promoter fails to convey title to the society or association of flat purchasers. The scheme does not cover enforcement of private agreements between individual purchasers."
The Court further held that the absence of promoter involvement and the lack of registration under Section 4 rendered the agreement legally inert for the purposes of MOFA. The Competent Authority, being a statutory body with limited jurisdiction, could not expand its powers by analogy or equity. The Court distinguished this case from those where the promoter was a party or where the agreement was part of the original sale transaction. It emphasized that judicial restraint requires adherence to statutory boundaries, even when parties seek equitable relief.
The Court explicitly declined to adjudicate the merits of the private agreement, stating that its role was confined to determining jurisdictional competence under MOFA. It affirmed that the respondent remained free to pursue civil remedies, including a suit for specific performance, in a civil court.
What This Means For Similar Cases
This judgment establishes a clear jurisdictional boundary for MOFA’s Competent Authorities. Practitioners must now carefully assess whether a dispute involves a promoter’s statutory obligation before invoking Section 11(3). Private agreements between flat purchasers, even if documented and signed, cannot be enforced through MOFA proceedings unless the promoter is a party and the agreement qualifies as a registered sale under Section 4. This will likely reduce the burden on specialized forums and prevent forum shopping. Future litigants must file civil suits for enforcement of such private arrangements, preserving MOFA’s intended scope. The ruling also reinforces the principle that statutory tribunals cannot assume jurisdiction beyond their express mandate, even in the interest of convenience or perceived fairness. This precedent will apply uniformly across Maharashtra and may influence interpretations of similar housing laws in other states.
