Bombay HC: Harshad Co-op Society Gains Automatic Ownership of Buildings

Summary: The Bombay High Court decided in favor of Harshad Co-operative Housing Society, allowing them to automatically get ownership of two buildings, Harshad B and Harshad C, even though Lokmanya Pan Bazar Association Ltd. disagreed. The court found that the society had the right to the property under the Maharashtra Ownership Flats Act (MOFA).

Background of the Case

In 1969, Lokmanya Pan Bazar Association Ltd. bought land in Mumbai to build buildings for its members. They later allowed Lokmanya Construction Co. to build four buildings, but only Harshad B and Harshad C were finished. The association argued that the land was still theirs and that the members were only "Special Patron Members" without ownership rights.

Dispute Over Ownership

The Lokmanya Pan Bazar Association Ltd. claimed they couldn't transfer the land to Harshad Co-op Housing Society due to a special rule under the Urban Land Ceiling Act. They argued that the members, being "Special Patron Members," had no rights to form a co-operative society or demand ownership.

"The petitioner argues that MOFA does not apply because the buyers were described as 'Special Patron Members' and the land stayed with the company."

Society's Argument for Ownership

Harshad Co-op Housing Society, formed in 2002, argued that they were rightful flat buyers under MOFA. They had taken care of the buildings, paid taxes, and managed the property for years, fulfilling all responsibilities of ownership.

"Sections 10 and 11 of MOFA give flat buyers the right to form a co-operative society and seek ownership."

Court's Decision

Judge Amit Borkar ruled that MOFA applied to the deal, and Harshad Co-op Housing Society had a legal right to the land and buildings. The court rejected Lokmanya Pan Bazar Association Ltd.'s objections, stating that the automatic transfer of property was legal and valid.

"The Court holds that MOFA applies to the current deal and governs the relationship between the petitioner as promoter and the flat buyers."

Impact and Costs

The court ordered Lokmanya Pan Bazar Association Ltd. to pay Rs. 50,000 in costs to Harshad Co-op Housing Society. The decision reinforces the rights of flat buyers to secure ownership under MOFA, even when faced with technical objections.

"The petition is dismissed. The petitioner shall pay costs of Rs.50,000/- to Respondent No.3 society."

This ruling highlights the importance of protecting flat buyers' rights and ensuring that developers follow legal obligations under MOFA.