Neeta Sawant                                                                                                                                               WP-16318-2025   

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 16318 of 2025

Darshan Mandir Co-operative Housing

Society Limited

...Petitioner

V/s.

District Deputy Registrar, Co-operative

Society, Mumbai (4) and others.

...Respondents

________________

Ms. Vishaki Bhatia, for the Petitioner

Mr. A.I. Patel, Addi. GP with Mr. P.V. Nelson Rajan, AGP for, Respondent

No. 1- State

Mr. Mayur Khandeparkar with Mr. Subham Hundia & Mr. Roshan

Gaud i/b Orbit Law Services, for Respondent No. 5

________________

CORAM: SANDEEP V. MARNE, J.

RESERVED ON: 15 June 2026.

PRONOUNCED ON: 22 June 2026.

Judgment:

1) The issue that arises for consideration in the present

petition is whether pendency of Corporate Insolvency Resolution

Proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC)

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against the promoter can be a reason for the Competent Authority not

to exercise jurisdiction under Section 11(3) of Maharashtra Ownership

Flats (Regulation of the Promotion of Construction, Sale, Management

and Transfer) Act, 1963 (MOFA) and whether Section 14 of the IBC

creates a bar for the Competent Authority to grant deemed conveyance

in favour of organization of �at purchasers.

2) By this petition, Petitioner-Society challenges Order dated

4 September 2025 passed by the District Deputy Registrar, Co-operative

Societies, Mumbai City (4) and Competent Authority (Competent

Authority) rejecting Application No. 87 of 2025 seeking deemed

conveyance of land and building under Section 11 of MOFA with liberty

to �le fresh application upon conclusion of Corporate Insolvency

Resolution Proceedings (CIRP) pending against Respondent No.4.

3) Petitioner is a cooperative housing society formed and

registered under the provisions of Maharashtra Co-operative Societies

Act, 1960 (MCS Act). The Society is formed by purchasers of �ats in

building constructed at Final Plot No. 746 of T.P.S. III (Old Plot No.723),

Opp. Soniwadi Banquets, P.G.S. Kanji Swami Marg, Off. Shimpoli Road,

Borivali (West), Mumbai-400 092 (said property). M/s. Gautam Builders

(India) was the original owner of the said property who had executed

Development Agreement (DA) with M/s. Darshan Enterprises

(Respondent No.3) on 25 August 1983. In pursuance of the DA,

Respondent No.3 got plans sanctioned for construction of building on

the said property vide Intimation of Disapproval (IOD) dated 9

November 1985. Respondent No.3 constructed building on the said

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property and sold �ats therein to various purchasers. Respondent No.3

executed Agreements under Section 4 of MOFA with the �at purchasers.

Occupancy Certi�cate in respect of the building was issued on 3 August

2001. Under the Agreements executed with the �at purchasers,

Respondent No.3-Promoter agreed to execute a formal Indenture of

Conveyance through the original land owner-M/s. Gautam Builders

(India) by joining as con�rming parties to the Indenture.

4) Petitioner-Society received a communication from

Respondent No.4 (M/s. Vas Infrastructure Ltd) claiming that it had

acquired some of the adjoining properties and wanted to consume the

TDR in respect of the said property and sought NOC from the

Petitioner-Society. Petitioner learnt that Respondent No.4 had secured

conveyance in respect of the said property from Respondent Nos.2 and

3. Petitioner accordingly �led L.C. Suit No.1425 of 2011 against

Respondent Nos.2 to 4, inter-alia challenging the said conveyance. In its

Suit, Petitioner also sought conveyance of the said property. However,

during pendency of the Suit, Petitioner sought deletion of prayer for

conveyance from the Suit. The Court has allowed the application for

amendment of Plaint and has permitted deletion of praye r for

conveyance vide order dated 4 April 2025.

5) Petitioner thereafter �led Application No. 87 of 2025 before

the Competent Authority seeking deemed conveyance of the said

property and the building.

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6) Canara Bank (Financial Creditor) �led application under

Section 7 of IBC for initiation of CIRP against Respondent No.4 and by

order dated 11 March 2024, the Petition is admitted and Interim

Resolution Professional (IRP) is appointed in respect of Respondent

No.4. Accordingly, IRP (Respondent No.5) appeared on behalf of

Respondent No.4 in Application No. 87 of 2025 and opposed the same.

By order dated 4 September 2025, the Competent Authority has

accepted the objection raised by Respondent No.5 and has rejected

Petitioner’s application for deemed conveyance holding that the same

cannot be adjudicated in the light of initiation of CIRP against

Respondent No.4. The Competent Authority has accordingly granted

liberty to the Petitioner-Society to �le fresh application for deemed

conveyance upon conclusion of CIRP against Respondent No.4 or upon

express leave granted by the National Company Law Tribunal (NCLT).

Petitioner-Society is aggrieved by order dated 4 September 2025 and

has accordingly �led the present petition.

7) Ms. Bhatia, the learned counsel appearing for the Petitioner

submits that the Competent Authority has erred in not adjudicating

Petitioner's application for deemed conveyance. That mere pendency of

CIRP against Respondent No.4 cannot be a reason for the Competent

Authority not to exercise jurisdiction under Section 11(3) of the MOFA.

That Respondent No.4 is not the developer/promoter and th at

Petitioner is entitled to get conveyance of land from Respondent No.3,

who has the statutory duty to execute conveyance under Section 11 of

MOFA. That conveyance in favour of Respondent No.4 is itself void and

challenge to the conveyance is pending before the City Civil Court. That

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the case does not involve layout development and that therefore there

is no question of any additional construction being put up on the land.

That therefore Respondent No.4 has not secured any semblance of

rights in the said property through the so called indenture of

conveyance.

8) Ms. Bhatia further submits that IBC merely provides for a

recovery mechanism and therefore provisions of the said statute cannot

affect the statutory duty created on the Promoter to convey the land

and building in favour of the Society. That Respondent No.4 is a mere

trustee with obligation to convey the land and building. That the

Competent Authority exercising jurisdiction under Section 11 of MOFA

is performing the act which the promoter is required to perform. That

therefore provisions of Section 14 of the IBC cannot come in the way of

the Competent Authority performing the statutory functions. That

MOFA is a welfare legislation and the objective behind enacting Section

11 cannot be frustrated by denying conveyance merely on initiation of

CIRP against the Promoter. Ms. Bhatia prays for setting aside the

impugned order and for issuance of certi�cate of unilateral deemed

conveyance of the entire property along with the building.

9) Mr. Khandeparkar, the learned counsel appearing for

Respondent No.5 (IRP) opposes the petition submitting that

Respondent No.4 has stepped into the shoes of the promoter vide

conveyance dated 24 September 2007. That there is express bar under

Section 14 of the IBC on institution of any proceedings and on transfer

of any property of the corporate debtor. That therefore there is a

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statutory prohibition under Section 14 of the IBC on transfer of title in

respect of the land or building belonging to Respondent No.4. That

Competent Authority cannot direct conveyance in contravention of

provisions of Section 14 of IBC and has rightly rejected Society's

application. He submits that provisions of IBC prevail over the State

Legislation in the form of MOFA. He relies on provisions of Section 238

of IBC in support of his contention of supremacy of IBC over MOFA. In

support of his contention that proceedings for deemed conveyance

cannot lie against corporate debtor during pendency of CIRP, Mr.

Khandeparkar relies on judgment of the Apex Court in the case of

Alchemist Asset Reconstruction Co. Ltd. Versus. Hotel Gaudavan P.

Ltd. & Ors .

1

10) Alternatively, Mr. Khandeparkar submits that the Petitioner

has remedy under Section 60(5) of the IBC for securing an order for

deletion of the said property from the ambit of CIRP. That a speci�c

leave is granted to the Petitioner by the Competent Authority to apply

for deletion of said property from CIRP. In support of the contention

that Petitioner has alternate remedy of securing deletion under Section

60(5) of the IBC, Mr. Khandeparkar relies on judgment of the Apex

Court in Tata Consultancy Services Limited Versus. SK Wheels Private

Limited Resolution Professional, Vishal Ghisulal Jain

2

.

11) Mr. Khandeparkar submits that conveying the land and

building is one of the contractual obligations of the promoter, which

the incoming management must be aware of. That property rights are

1

2017 SCC Online SC 1362

2

(2022) 2 SCC 583

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also protected by moratorium imposed under Section 14 of the IBC.

That the intention behind IBC is to preserve the assets of the corporate

debtor. That the Moratorium has been imposed on 11 March 2024

whereas application for deemed conveyance was �led on 15 April 2025.

That therefore application for deemed conveyance cannot be

adjudicated till conclusion of CIRP. Petitioner is not remediless and can

always �le fresh application against the new management of

Respondent No.4 after conclusion of CIRP. Mr. Khandeparkar, however

fairly invites the attention of this Court to the judgment of this Court in

Santoshkumar Motilal Bhansali Versus. Competent Authority and

District Deputy Registrar, Co-operative Societies & Ors .

3

. He however

submits that the said judgment is delivered by referring to the judgment

in Anudan Properties Private Limited Versus. Mumbai Metropolitan

Region, Slum Rehabilitation Authority

4

which is a judgment in the

context of termination of a developer under Section 13(2) of the

Maharashtra Slum Areas (Improvement, Clearance and Redevelopment)

Act, 1971 (Slum Act). That therefore neither the judgment in Anudan

Properties Private Limited (supra) nor the judgment in Santoshkumar

Motilal Bhansali (supra) can have any remote application to the

present case. Mr. Khandeparkar accordingly prays for dismissal of the

petition.

12) Rival contentions urged on behalf of the parties now falls

for my consideration.

3

2026 SCC Online Bom 552

4

2025 SCC Online Bom 692

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13) As observed above, the issue that arises for consideration is

whether initiation of CIRP against Respondent No.4 can be a reason for

the Competent Authority not to exercise jurisdiction under Section 11

of MOFA for grant of deemed conveyance in Petitioner’s favour.

14) In the present case, Respondent No.4 is not the original

developer, who had undertaken construction of the building or had sold

the �ats by executing agreements with the purchasers.

15) The original developer is Respondent No.3, who had

secured development rights in respect of the said property from land

owner/Respondent No.2. The development permission was secured by

Respondent No.3 and the entire construction has been carried out by

Respondent No.3. The �at purchase Agreements under Section 4 of

MOFA were also executed by Respondent No.3. Under Clause-33 of the

MOFA Agreements, it is Respondent No.3 who has underta ken

obligation to convey the land and the building in favour of the

organization formed by the �at purchasers. Clause-33 of MOFA

Agreement reads thus:

33. After the building is complete and ready and �t for occupation and

after the Society or Limited Company is incorporated and registered

and only after all the �ats/shops/garages in the said building have

been sold and disposed off by the Developers and after the Developers

shall have received all dues payable to them under the terms of the

Agreement with various purchaser thereof the Developers shall

procure in favour of the said Society or Limited Company a formal

Indenture of Conveyance from the said M/s. GAUTAM BUILDER S

(INDIA) and the Developers shall join as Con�rming Parties,

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16) Section 11 of MOFA puts a statutory obligation on the

promoter to perfect his title in respect of the land and to convey his

right, title and interest in the land and the building in favour of the

organization formed by the �at purchasers. Rule 9 of Maharashtra

Ownership Flats (Regulations of the Promotion of Construction, Sale,

Management and Transfer) Rules, 1964 prescribes the period for

execution of conveyance as four months from the date of formation of

cooperative society or company or association of apartments. Section

11 of MOFA provides thus:

11. Promoter to convey title, etc., and execute documents,

according to agreement.—

(1)] A promoter shall take all necessary steps to complete his title and

convey to the organisation of persons, who take �ats, which is

registered either as a co-operative society or as a company as

aforesaid or to an association of �at takers 5 [or apartment owners],

his right, title and interest in the land and building, and execute all

relevant documents therefor in accordance with the agreement

executed under section 4 and if no period for the execution of the

conveyance is agreed upon, he shall execute the conveyance within the

prescribed period and also deliver all documents of title relating to the

property which may be in his possession or power.

(2) It shall be the duty of the promoter to �le with the Competent

Authority, within the prescribed period, a copy of the conveyance

executed by him under sub-section (1).

(3) If the promoter fails to execute the conveyance in favour of the Co-

operative society formed under section 10 or, as the case may be, the

Company or the association of apartment owners, as provided by sub-

section (1), within the prescribed period, the members of such Co-

operative society or, as the case may be, the Company or the

association of apartment owners may, make an application, in writing,

to the concerned Competent Authority accompanied by the true

copies of the registered agreements for sale, executed with the

promoter by each individual member of the society or the Company or

the association, who have purchased the �ats and all other relevant

documents (including the occupation certi�cate, if any), for issuing a

certi�cate that such society, or as the case may be, Company or

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association, is entitled to have an unilateral deemed conveyance,

executed in their favour and to have it registered.

(4) The Competent Authority, on receiving such application, within

reasonable time and in any case not later than six months, after

making such enquiry as deemed necessary and after verifying the

authenticity of the documents submitted and after giving the

promoter a reasonable opportunity of being heard, on being satis�ed

that it is a �t case for issuing such certi�cate, shall issue a certi�cate

to the Sub-Registrar or any other appropriate Registration Of�cer

under the Registration Act, 1908 (16 of 1908), certifying that it is a �t

case for enforcing unilateral execution, of conveyance deed conveying

the right, title and interest of the promoter in the land and building in

favour of the applicant, as deemed conveyance.

(5) On submission by such society or as the case may be, the Company

or the association of apartment owners, to the Sub-Registrar or the

concerned appropriate Registration Of�cer appointed under the

Registration Act, 1908 (16 of 1908), the certi�cate issued by the

Competent Authority alongwith the unilateral instrumen t of

conveyance, the Sub-Registrar or the concerned appropr iate

registration Of�cer shall, notwithstanding anything contained in the

Registration Act, 1908 (16 of 1908), issue summons to the promoter to

show cause why, such unilateral instrument should not be registered

as ‘deemed conveyance’ and after giving the promoter and the

applicants a reasonable opportunity of being heard, may on being

satis�ed that it was �t case for unilateral conveyance, register that

instrument as, ‘deemed conveyance’.

17) Sub-sections (2) to (5) were inserted in Section 11 of MOFA

by Maharashtra Amendment Act 4 of 2008 w.e.f. 25 February 2008 under

which a provision is made for deemed conveyance of the land and the

building when promoter fails to carry out statutory duty under sub-

section (1). Thus, where the promoter fails to convey land and building

within the time stipulated under Rule 9 and as per Section 11(1), the

society/company/association can �le an application to the Competent

Authority, who can make an enquiry and issue a certi�cate to the Sub-

Registrar certifying that the case is �t for enforcing unilateral execution

of conveyance deed conveying right, tittle and interest of the promoter

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in the land and the building in favour of the

society/company/association as deemed conveyance. The Certi�cate so

issued by the Competent Authority along with unilateral instrument of

conveyance can be registered under Section 11(5) of MOFA.

18) In the present case, the statutory obligation under Section

11(1) of MOFA to convey land and building was on Respondent No.3. It

was both contractual obligation under clause 33 of Agreement for Sale,

as well as statutory duty under Section 11(1) of MOFA. The Occupancy

Certi�cate in respect of the building was issued on 3 August 2001. The

Petitioner was formed and registered as a cooperative housing society,

under Section 10 of MOFA read with the provisions of the MCS Act, on

10 December 1991. However, Respondent No.3 failed in its statutory

duty and did not convey his right, title and interest in the land and the

building in favour of the Petitioner-Society both in accordance with

clause-33 of the Agreement for Sale, as well as, under Section 11(1) of

MOFA.

19) Respondent No.4 has parachuted on the scene and claims

to have secured conveyance in respect of the said property from

Respondent Nos. 2 and 3 and accordingly claims title in respect of the

said property. The main reason for doing so apparently is because

Respondent No.4 has purchased adjoining properties and believes that

some TDR is available in the said property which Respondent No.4

apparently intends to utilize for carrying out construction in the

adjoining properties. At this juncture, exact plans of Respondent No.4

are unknown. Whether it wants to carry out additional construction

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within the said property or whether he merely wants to utilize TDR

arising out of the said property and load the same in construction

proposed on adjoining properties is not known as this juncture. Be that

as it may. However, it would be suf�ce to observe that sanctioned plans

indicates that the total FSI permissible in respect of the said property

admeasuring 1794.20 sq.mtrs was 1814.20 sq.mtrs and the FSI uitlised

in construction of the building of Petitioner society is 1802.44 sq.mtrs.

Thus, only built-up area admeasuring 11.76 sq.mtrs remain ed

unutilized. Thus, virtually the entire development potential, as per the

sanctioned plan, has already been utilized by Respondent No.3. As

observed above, Respondent No.3 had contractual obligations, as well

as statutory duty to convey the entire land and building in favour of the

Petitioner-Society. Therefore, it is highly questionable as to what was

left in the land to be purchased by Respondent No.4.

20) Prima-facie therefore it appears that what is purchased by

Respondent No.4 is merely an obligation to convey the land and

building in accordance with Section 11(1) of MOFA. This Court does not

appreciate action on the part of Respondent No.3 in selling land in

favour of a third developer when the title therein was statutorily

required to be transferred in favour of the Petitioner-Society. Thus,

what is done in the present case is purchase of land by Respondent No.4

which is statutorily meant to be conveyed to the Petitioner-Society.

This is apparently done with the aim of exploiting additional

development rights either through TDR or out of change in FSI regime

due to introduction of Development Control Regulations. However, this

Court is not proposing to delve deeper into this aspect since

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adjudication of Petitioner-Society's application for deemed conveyance

is yet to be made by the Competent Authority. The only reason why

these observations are made even before adjudication of Petitioner's

obligation for deemed conveyance is because Respondent No.4 is

opposing the application for deemed conveyance by claiming that he is

now the promoter and its IRP has taken a stand that pendency of CIRP

against Respondent No. 4 suspends right of the Petitioner to seek

conveyance of land.

21) Coming back to the core issue involved in the present case,

in my view, provisions of Section 14 of the IBC cannot come in the way

of Competent Authority exercising statutory duty imposed on the

promoter under Section 11(1) of MOFA. In the present case, Respondent

No.4 is not the original promoter. He is merely a subsequently

purchaser of land, which is meant to be conveyed statutorily in favour

of the Petitioner-Society. Respondent No.4 is subjected to CIRP and the

NCLT has passed order dated 11 March 2024 admitting the petition �led

by Canara Bank, a �nancial creditor, appointing IRP and imposing a

moratorium under Section 14 of IBC. The operative part of order dated

11 March 2024 passed in CP(IB) No. 314/NB/MAH/2023 reads thus:

(a) The petition bearing CP(IB)-314/MB/2023 �led by CANARA BANK,

the Financial Creditor, under Section 7 of the IBC, 2016 read with rule

4(1) of the Insolvency & Bankruptcy (Application to Adjudicating

Authority) Rules, 2016 for initiating Corporate Insolvency Resolution

Process (CIRP) against the Corporate Debtor M/s. VAS

INFRASTRUCTURE LIMITED [CIN: L65100MH1994PLC076538] is

hereby admitted;

(b) Mr. Ashok Kumar Golechha, an Insolvency Professional having

registration No.IBBI/IPA-002/IP-N000932/ akgolecha9@gmail.com),

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having his address at: B-703/704, River Park CHS Ltd, Dattani Park

Road, Thakur Village, Kandivali East, Mumbai-400 092; is hereby

appointed as Interim Resolution Professional to carry out the

functions as mentioned under IBC, the fee payable to IRP/RP shall

comply with the IBBI Regulations/Circulars/ 

(c) The Financial Creditor shall deposit a sum of ₹ 5,00,000/- (Rupees

Five Lakhs only) with the IRP towards the initial CIRP costs by way of

a Demand Draft drawn in favour of the Interim Resoluti on

Professional appointed herein, immediately upon communication of

this Order.

(d) There shall be a moratorium under Section 14 of the IBC, in regard

to the following:

(i) The institution of suits or continuation of pending suits or

proceedings against the Corporate Debtor including execution

of any judgment, decree or order in any court of law, tribunal,

arbitration panel or other authority;

(ii) Transferring, encumbering, alienating or disposing of by

the Corporate Debtor any of its assets or any legal right or

bene�cial interest therein;

(iii) Any action to foreclose, recover or enforce any security

interes created by the Corporate Debtor in respect of its

property including any action under the Securitization and

Reconstruction of Financial Assets and Enforcement of

Security Interest (SARFAESI) Act, 2002;

(iv) The recovery of any property by an owner or lessor where

such property is occupied by or in possession of the Corporate

Debtor.

(e) Notwithstanding the above, during the period of moratorium-

i. The supply of essential goods or services to the corporate

debtor, if continuing, shall not be terminated or suspended or

interrupted during the moratorium period;

ii. That the provisions of sub-section (1) of section 14 of the

IBC shall not apply to such transactions as may be noti�ed by

the Central Government in consultation with any sectoral

regulator;

(f) The moratorium shall have effect from the date of this order till the

completion of the CIRP or until this Tribunal approves the resolution

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plan under sub-section (1) of section 31 of the IBC or passes an order

for liquidation of Corporate Debtor under section 33 of the IBC, as the

case may be.

(g) Public announcement of the CIRP shall be made immediately as

speci�ed under section 13 of the IBC read with regulation 6 of the

Insolvency & Bankruptcy Board of India (Insolvency Resolution

Process for Corporate Persons) Regulations, 2016.

(h) During the CIRP Period, the management of the Corporate Debtor

shall vest in the IRP or, as the case may be, the RP in terms of section

17 of the IBC. The of�cers and managers of the Corporate Debtor shall

provide all documents in their possession and furnish every

information in their knowledge to the IRP within a period of one week

from the date of receipt of this Order, in default of which coercive

steps will follow.

(i) The Registry is directed to communicate this Order to the Financial

Creditor, the Corporate Debtor and the IRP by Speed Post and email

immediately, and in any case, not later than two days from the date of

this Order.

(j) A copy of this Order be sent to the Registrar of Companies,

Maharashtra, Mumbai, for updating the Master Data of the Corporate

Debtor.

22) Thus, by virtue of the moratorium imposed under Section

14 of IBC, there is a prohibition from institution or continuation of suits

or proceedings against Respondent No.4 and from transferring any of

the assets of Respondent No.4 and from recovery of any property in

possession of Respondent No.4. The issue for consideration is whether

grant of deemed conveyance under Section 11(3) and (4) of MOFA by

the Competent Authority would amount to transfer or alienation of

property/asset of the corporate debtor within the meaning of Section 14

of the IBC. The issue is no more res-integra and is covered by direct

judgment of this Court in Santoshkumar Motilal Bhansali (supra), in

which it is held in paras-8 to 10 as under:

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8. The judgment of this court in Anudan Properties Private Limited vs

Mumbai Metropolitan Region, Slum Rehabilitation Authority and

Others 2025 SCC OnLine Bom 692 explains how to deal with con�icts

between IBC proceedings and statutory obligations under a welfare

statute. It draws a clear distinction between monetary claims that get

frozen under a resolution plan and statutory obligations that continue

despite insolvency. It also holds that Section 14 of the IBC does not

bar statutory authorities from discharging statutory functions.

9. Applying that reasoning to the present facts, two points become

relevant. First, the petitioner's reliance on Section 14 of the IBC to

restrain the Competent Authority from exercising powers under

Section 11 of the MOFA Act cannot succeed. The Competent Authority

performs a statutory function. It confers a statutory bene�t upon �at

purchasers. This function is not in the nature of a recovery action. It is

not a claim enforcement mechanism. It is an exercise of statutory

power to perfect title in favour of an organization of purchasers. Under

the logic of Anudan Properties, statutory rights of third parties and

statutory duties of authorities continue despite insolvency or

moratorium.

10. Second, the argument that the moratorium or the resolution plan

extinguishes factual defaults or immunizes the promoter from

consequences cannot be accepted. Anudan Properties holds that a

resolution plan may extinguish monetary claims but it does not erase

past defaults. It does not prevent statutory regulators from acting in

public interest. The MOFA framework creates statutory contracts

under Section 4. The obligation to convey title is part of that statutory

framework. Proceedings for deemed conveyance enforce performance

of a statutory obligation in specie. They do not seek money. They do

not constitute debt recovery. Therefore, they fall outside the bar of

Section 14.

23) In Santoshkumar Motilal Bhansali this Court has relied

upon the judgment in Anudan Properties Private Limited (supra) in

which the issue for consideration was whether an order terminating

appointment of developer under Section 13(2) of Slum Act can be

passed during pendency of CIRP against such developer. This Court

analysed the statutory scheme under Section 14 and 238 of the IBC.

One of the issues for consideration before this Court was whether

approval of resolution plan by NCLT under Section 31 of IBC would

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override or nullify developer's obligations and liabilities arising under

the Slum Act and whether the SRA was barred or restricted by IBC from

taking action under Section 13(2) of the Slum Act due to binding effect

of the resolution plan. This Court considered the interplay between the

provisions of IBC and the Slum Act and held that the two legislations

are enacted with distinct purposes. It is held that IBC is an economic

and �scal legislation with object of facilitating timely resolution of

corporate insolvency in a manner that maximizes the value of assets

and facilitates the revival of a failing company. On the other hand, the

Slum Act is a social welfare legislation which is intended at

rehabilitating slum dwellers, promoting, improving and redeveloping

the slum areas and securing basic housing and dignity for those who

live in slums. This Court also took into consideration provisions of

Section 238 of the IBC which seeks to give overriding effect over

inconsistent provisions of other laws. This Court however held that the

provisions of the Slum Act are not inconsistent with the objectives of

the IBC. This Court further held that certain non-monetar y

consequences which arise under welfare legislation/Slum Act cannot be

lightly brushed aside merely because insolvency proceedings under the

IBC have commenced or concluded. The Court held that developer's

removal under Section 13(2) of the Slum Act is a non-monetary

regulatory action �owing directly out of breach of obligation by a

developer which cannot be treated as a 'claim' or 'debt' as contemplated

under IBC. This Court held in paras-37, 38, 40, 47 and 48 as under:

37. At the outset, it is necessary to recognize that the IBC and the Slum

Act are legislations enacted with distinct purposes. The IBC is an

economic and �scal legislation. Its object is to facilitate timely

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resolution of corporate insolvency in a manner that maximizes the

value of assets, balances the interests of all stakeholders, and allows

for the revival of a failing company. On the other hand, the Slum Act is

a social welfare legislation. It is intended to rehabilitate slum dwellers,

promote improvement and redevelopment of slum areas, and secure

basic housing and dignity for those who live in slums. Although these

two statutes operate in separate �elds, in certain cases, their

objectives may intersect. In fact, in the present case, the two

objectives are not in con�ict, but rather aligned. The revival of the

corporate debtor would necessarily involve the succe ssful

implementation of the slum redevelopment scheme undertaken by it.

The company, being a developer under the slum scheme, is expected

to complete the rehabilitation component, and only then can it access

the free-sale portion of the land, which is likely its sole source of

revenue. Therefore, completion of the project is not only in the

interest of the slum dwellers but also crucial for the �nancial revival of

the corporate debtor. The IBC does not provide that once a resolution

plan is approved, the corporate debtor becomes immune from all

statutory or regulatory obligations. What the IBC prohibits is the

institution or continuation of proceedings for recovery of past dues

after the resolution plan is approved. It does not extinguish statutory

duties, especially where public interest or regulatory compliance is

involved.

38. In light of this, the key question that arises is whether the SRA’s

action of invoking Section 13(2) of the Slum Act after the approval of

the resolution plan amounts to enforcing a claim that stands

extinguished under the IBC, or whether it is an independent

regulatory action which survives the insolvency process. Section 238

of the IBC provides a non-obstante clause, stating that “the provisions

of this Code shall have effect, notwithstanding anything inconsistent

therewith contained in any other law for the time being in force.”

However, this clause comes into play only if there is an actual

inconsistency between the two statutes. It is wellsettled that courts

must �rst examine whether a con�ict truly exists, and whether it is

impossible to give effect to both laws simultaneously. Not every action

under the Slum Act that impacts a company undergoing resolution

under IBC can be said to be inconsistent with the Code. If both laws

can be applied harmoniously, such an interpretation must be

preferred. The nonobstante clause under Section 238 does not operate

in a vacuum. It only overrides those provisions of other laws which are

irreconcilably inconsistent with the IBC. Therefore, the Court must

interpret both the IBC and the Slum Act in a manner that gives effect

to their respective objects, unless such an interpretation is legally

untenable.

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40. Undoubtedly, Section 238 of the IBC gives it overriding effect over

inconsistent provisions of other laws. But in the present scenario, the

Slum Act's mandate of ensuring timely rehabilitation of slum dwellers

is not inconsistent with the objectives of the IBC. Rather, it furthers

the very aim of keeping the corporate debtor as a going concern by

facilitating the completion of the project that forms the basis of the

company’s revival. It must be noted that the IBC is not merely a tool

for liquidation or asset-stripping, but a mechanism for holistic revival

of viable companies. In a slum redevelopment project, the success and

viability of the corporate debtor hinges on cooperation from slum

dwellers and compliance with SRA guidelines. If the developer fails to

honour its obligations – such as payment of transit rent or timely

completion of rehabilitation buildings – the project collapses not only

�nancially but also socially. In such a situation, the SRA stepping in to

rescue the project is a necessary regulatory response and a sovereign

function exercised in public interest. The principle of public interest

penetrates insolvency law. Certain actions, even if taken post-approval

of the resolution plan, may be allowed if they serve broader public

purposes – such as environmental protection, safety norms, or

statutory compliance. Similarly, the SRA’s action in replacing a

defaulting developer to protect the interests of slum dwellers is not a

private remedy for monetary loss, but a regulatory measure in the

public interest. Therefore, such an action cannot be said to violate or

be inconsistent with the IBC. It operates in a separate domain, and

both legislations can be applied in a manner that furthers their

respective objectives without con�ict.

47. It is, therefore, clear that certain non-monetary consequences

which arise under welfare legislations like the Slum Act cannot be

lightly brushed aside merely because insolvency proceedings under

the IBC have commenced or concluded. The removal of a developer

under Section 13(2) of the Slum Act is one such consequence. Another

example arising in the present case is the proposed acquisition of the

project land by the SRA. As per the Slum Act, once a developer is

removed due to non-performance, the SRA has the power to acquire

the land belonging to the outgoing developer, so that the same land

can be handed over to the incoming developer for completing the

rehabilitation scheme. The Resolution Professional (RP) has

contended that such acquisition would adversely affect the corporate

debtor and its creditors, as it would transfer a valuable asset out of the

company. However, this argument fails to take into account a crucial

fact — that the said land was already encumbered. It was never an

unburdened or free asset in the hands of the corporate debtor. The

land was subject to slum dwellers’ occupation, and its value was

inherently tied to the successful execution of the rehabilitation

scheme. If the scheme itself is terminated due to the developer’s

failure, then the land — in its encumbered condition — holds little

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standalone market value. Its true worth arises only if the development

scheme is implemented. Therefore, if the project is taken away due to

breach, the associated land no longer holds the same developmental

value for the corporate debtor. Moreover, the acquisition of land in

this context is for a public purpose — namely, to ensure that the slum

rehabilitation project is completed and the rights of slum dwellers are

protected. As per law, compensation would be payable to the outgoing

developer, and such compensation would become part of t he

insolvency estate. Thus, the corporate debtor is not being dispossessed

without remedy; rather, it is being divested of an asset which it was

unable to utilise for the public good, and that too, in accordance with

legal process.

48. The legal consequence of the developer’s removal — which is a

non-monetary regulatory action — is that the corporate debtor loses

its role in the project and the chance to earn pro�ts from the free-sale

component. However, this consequence �ows directly from the breach

of obligations by the developer. This is not in the nature of a “claim”

or “debt” as contemplated under the IBC. Instead, it is a regulatory

forfeiture, which arises when a statutory authority determines that the

developer has failed to ful�l its public obligations. The IBC does not

grant immunity to a corporate debtor from such regulatory actions

unless they are shown to be mala �de or merely intended to recover

money — which is clearly not the case here. To allow a defaulting

developer to bene�t from insolvency proceedings by continuing with

the project despite having failed to discharge its duties would be to

permit a party to take advantage of its own wrong. This would defeat

not only the object of the Slum Act but also broader principles of

fairness and public interest. A party cannot walk away from its

promises to slum dwellers, undergo resolution under the IBC to

restructure its �nances, and then return to claim the project or the

land which it failed to develop. Such an approach would undermine

the integrity of both statutory frameworks.

24) The Special Leave Petition �led against the judgment of

this Court in Anudan Properties Private Limited is dismissed by the

Hon’ble Supreme Court on 7 April 2025.

25) Though the judgment in Anudan Properties Private

Limited is rendered in the context of interplay between the provisions

of IBC and Slum Act, the subsequent judgment in Santoshkumar

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Motilal Bhansali takes into account the interplay between the

provisions of Section 14 of IBC and Section 11 of MOFA. The judgment

in Santoshkumar Motilal Bhansali provides a complete answer to the

issue at hand. In that case, this Court has borrowed the analogy of

distinction between freezing of monetary claims under resolution plan

and statutory obligations which continue despite insolvency in the

context of adjudication of application for deemed conveyance. This

Court has held that the Competent Authority performs a statutory

function and confers a statutory bene�t upon �at purchasers which

function is not in the nature of a recovery action. It is not a claim

enforcement mechanism. It is an exercise of statutory power to perfect

title in favour of an organization of purchasers. Therefore, it is held that

statutory rights of third parties and statutory duties of authorities

continue despite insolvency or moratorium.

26) The ratio of the judgment in Santoshkumar Motilal

Bhansali binds me. I would like to further build upon the ratio of that

judgment by observing that an action initiated by a �nancial creditor

against a corporate debtor under Section 7 of IBC and a moratorium

imposed under Section 14 while admitting the application of that

�nancial creditor cannot negate or even suspend the statutory duty of

the Competent Authority under Section 11(3) and (4) of MOFA. One

must bear in mind the objective behind amending the provisions of

Section 11 by 2008 amendment by incorporating a provision for deemed

conveyance. The concept of deemed conveyance is introduced after

noticing a large-scale failure on the part of the developers in

transferring title in the land and after noticing a trend followed by

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almost all developers in deliberately delaying conveyance of land with a

view to endlessly milk the additional development rights created in the

land with passage of time. The developers in cities like Mumbai, Pune

etc. were deliberately not conveying land in favour of societies so as to

exploit further development potential created in the land due to

sanction of additional FSI/TDR etc. The Legislature took note of the

ground reality that the provisions of Section 11, as it stood prior to

amendment, were not suf�cient and it was taking unduly long time for

decision of suits for conveyance as there was large scale failure on the

part of the developers to perform statutory duty imposed under Section

11. It is with a view to provide a swift mechanism for the societies to

secure title in respect of the land and the building that special provision

for granting unilateral deemed conveyance was introduced in the form

of sub-sections (2) to (5) in Section 11 of MOFA. This statutory

objective cannot be permitted to be defeated merely on account of

provisions of Section 14 of IBC.

27) What is sought to be done in the present case is an attempt

on the part of Respondent No.4 to circumvent the provisions of Section

11 of MOFA by taking aid of CIRP initiated by an altoge ther

unconnected entity (Canara Bank). In many cases, the developers are

corporate entities who undertake numerous projects over the period of

time. If such developer-company fails to convey land in contravention

of Section 11(1) of MOFA in respect of a building which is constructed a

quarter of century ago but attracts CIRP from an unconnected �nancial

creditor, the same would not suspend the statutory obligation under

Section 11(1) imposed on such developer. Otherwise, errant developers

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would misuse the moratorium imposed on them under Section 14 of

IBC to inde�nitely delay conveyance under Section 11(1) of MOFA. The

Courts must be alive to the ground reality that several buildings in

cities like Mumbai, Pune etc are in the need of redevelopment. The

normal life of a building in Mumbai Metropolitan Region is statutorily

recognised as 30 years, after which it is incumbent for the owner of the

building to a secure structural audit report certifying its stability. This is

on account of peculiar weather conditions in MMR areas. Thus, several

buildings in MMR areas are in need of redevelopment since the

buildings have crossed their lifespans. The Society whose building

becomes dangerous or dilapidated, but does not have a title in the land

or building for undertaking redevelopment, uses the route under

Section 11(3) of MOFA to secure conveyance in a swifter manner.

However, if provisions of Section 14 of IBC are interpreted to mean that

proceedings for deemed conveyance cannot be adjudicated by

Competent Authority till resolution plan is approved by NCLT, the same

would put Society's building, as well as lives of occupants therein, in

danger. In a case where Society's building is in eminent need of

redevelopment, but Society is unable to undertake redevelopment

because of absence of conveyance and where deemed conveyance is

denied on account of initiation of CIRP against the developer, the same

would put the lives of occupants of the building in danger.

28) What must also be borne in mind is the fact that in most of

the cases, there is virtual loss of right of the promoter in the land and

building due to combined effect of provisions of Section 4 and Section

11 of MOFA. With sale of each �at in the building, there is dilution of

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title of the developer in the land. The moment all the �ats in the

building are sold, the developer is virtually divested of title in the land.

While things may look slightly complicated in respect of multistory

towers, one may take into consideration a simple illustration of a

developer undertaking construction of four �ats on a plot of land. When

all four �ats in the building are constructed and sold, the four �at

purchasers acquire 25% right each in the land and the developer looses

its title in the land. In a similar manner, when all �ats in a multistorey

tower are sold and a cooperative society/company of �at purchasers is

formed, the promoter’s title in the land gets divested and such

society/company becomes entitled to own the land on which the

building is constructed. The things may also get slightly complicated in

a layout development. However, even qua layout development, similar

analogy would apply and the developer loses proportionate title in the

land to the extent of completed buildings in the layout. It cannot be

that the developer exploits development potential in the land,

constructs �ats and sells them to the purchasers, but still retains

ownership in the land. This concept is unknown to law. On the other

hand, provisions of Sections 4 and 11 of MOFA ensure that the

developer is divested of his right, title and interest in the land and the

building which is statutorily required to be transferred/conveyed to the

organisation of �at purchasers. Thus what is conveyed by the

Competent Authority need not necessarily be the ‘asset’ of the promoter

on account of operation of concept of divesting.

29) Ordinarily only an owner of the immovable property can

execute conveyance thereof. However, a unique concept of ‘deemed

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conveyance’ is introduced in MOFA for reasons discussed above. The

concept of deemed conveyance envisages transfer of title of land owner

without his consent and in absence of his signature on the instrument

of conveyance. The transaction of deemed conveyance is effected

through registration of a certi�cate issued by the Component Authority.

This concept of deemed conveyance envisaging transfer of title of a

landowner against his desire is thus based on the principle of divesting

of title. Once the development potential as per the sanctioned plan is

exploited, buildings are constructed, �ats are sold and an organization

of �at purchasers is formed, the developer loses title in the land and the

building. The law enjoins a duty on him to transfer the title in the land

and the building in favour of the organization of �at purchasers

[Section 11(1) of MOFA]. However, if the developer fails in performance

of statutory duty by not transferring the title, the Competent Authority

steps into developer’s shoes and issues a certi�cate of unilateral

deemed conveyance. The law thus presumes loss of title of the

developer once failure occurs on his part to perform the duty under

Section 11(1) of MOFA. This presumption is however rebuttable. Even

after the certi�cate of unilateral deemed conveyance is issued and

registered, the developer can still institute a suit and demonstrate that

the title in the land or in portion thereof still vests in him. Thus, the

statutory scheme of Section 11 of MOFA is such that the re is

presumption of loss of title in the land and the building and it is on this

presumption that a certi�cate of unilateral deemed conveyance is

issued by the Component Authority. Till the developer secures a

declaration from a Court to the contrary through a decree, the

instrument of deemed conveyance based on such presumption

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continues to remain valid for all purposes. Considering this peculiar

statutory scheme of Section 11 of MOFA, it is dif�cult to hold that the

deliberate act of the developer in not transferring the title in the land in

violation of statutory duty under Section 11(1) results into holding of

any ‘asset’ by him within the meaning of Section 14 of IBC, which

cannot be transferred on account of imposition of a moratorium. What

is effected by the Competent Authority is, not transfer of property of

the corporate debtor in real sense, but mere certi�cation that the title

in the land and building has now vested in the organization of �at

purchasers by reason of failure to perform statutory duty by the

developer. In my view therefore, provisions of Section 14 of IBC do not

come in the way of Competent Authority execrcising powers under

Section 11 of MOFA.

30) Applying the above analogy to the present case,

Respondent No.3 is virtually divested of right, title and interest in the

land by exploitation of almost the entire development potential in the

land. There is a statutory duty on Respondent No.3 to convey his right,

title and interest in the land and building in favour of the Petitioner-

Society. All that remained was performance of a formal act of execution

of conveyance. Section 11(3) of MOFA ensures that failure to perform

that formal act by the developer does not come in the way of the society

acquiring title in the land by applying for deemed conveyance. In such

circumstances, if Respondent No.4 has still chosen to s ecure

Respondent No.3's rights and obligations in the land, by way of the

alleged conveyance, Respondent No.4 has stepped into the shoes of

Respondent No.3 and the statutory duty under Section 11(1) of MOFA

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would get transferred to Respondent No.4. What needs to be done by

Respondent No.4 is to perform that formal act, which Respondent No. 3

failed to perform. Section 11(3) and (4) of MOFA ensures that the

Competent Authority performs duty which the Respondent Nos. 3/4 are

supposed to discharge under Section 11(1) of MOFA. Therefore, if this

statutory scheme of MOFA is understood in the correct perspective, it is

dif�cult to hold that grant of deemed conveyance by the Competent

Authority under Section 11 of MOFA would be a transfer or alienation of

asset of Respondent No. 4 within the meaning of Section 14 of IBC.

31) Also, the Respondent No. 4 or its new management is not

rendered remediless. Apart from the IRP opposing the application for

deemed conveyance by demonstrating that some rights of Respondent

No. 4 continue to subsist in the land which cannot be conveyed to the

Petitioner, the new management of Respondent No. 4 can also institute

a suit challenging the certi�cate of unilateral deemed conveyance. It is

well settled that the certi�cate of deemed conveyance is not a �nal

determination of rights and entitlements of parties qua the conveyed

land. The aggrieved party is not precluded from �ling a suit and from

establishing title in the conveyed land. This principle is recognised in

the judgment of the Apex Court in Arunkumar H. Shah HUF Vs. Avon

Arcade Premises CHSL

5

. This is yet another reason why grant of

certi�cate of deemed conveyance cannot be treated as �nal alienation

of asset of the promoter who is in CIRP. Since the promoter in CIRP has

the remedy of �ling a suit through IRP or through the new

management, the legislative object behind Section 11 of MOFA must be

5

(2025) 7 SCC 249

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permitted to operate with full force rather than impeding the same by

mechanically applying the provisions of Section 14 of IBC.

32) Reliance by Mr. Khandeparkar on provisions of Section 238

of IBC is misplaced. Section 238 of IBC provides thus:

238. Provisions of this Code to override other laws.

The provisions of this Code shall have effect, notwithstanding anything

inconsistent therewith contained in any other law for the time being in force

or any instrument having effect by virtue of any such law. 

The effect of provisions of Section 238 has already been discussed by

this Court in Anudan Properties Private Limited in which it is held that

provisions of Slum Act are not inconsistent with the provisions of IBC.

The analogy of the judgment in Anudan Properties Private Limited is

borrowed by this Court and is applied even in relation to Section 11 of

MOFA in Santoshkumar Motilal Bhansali. In that view of the matter

and also in view of the discussions made above, it is dif�cult to hold

that the provisions of Section 11 of MOFA empowering Competent

Authority to grant unilateral deemed convenance of land and the

building upon failure of promoter to perform statutory duty is

inconsistent with the provisions of IBC.

33) Mr. Khandeparkar has relied upon provisions of Section

60(5) of the IBC in support of his contention that Petitioner can

exercise a remedy of �ling an application for securing deletion of the

said property from the ambit of CIRP and in support he has relied upon

judgment of the Apex Court in Tata Consultancy Services Limited

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(supra). However, since this Court has taken a view that initiation of

CIRP does not prevent Competent Authority from exercising statutory

powers under Section11(3) of MOFA, there is no need to refer to the

provisions of Section 60(5) of IBC. Since application for unilateral

deemed conveyance under Section 11 of MOFA can be decided by

Competent Authority despite pendency of CIRP, there is no necessity of

�ling an application to NCLT by the Petitioner under Section 60(5) of

the IBC.

34) Mr. Khandeparkar has relied upon the judgment of the

Apex Court in the case of Alchemist Asset Reconstruction Ltd.(supra) in

which the issue was about permissibility to conduct arbitration against

corporate debtor contrary to the provisions of Section 14(1)(a) of IBC.

Performance of statutory duty by Competent Authority under Section

11(3) cannot be treated as institution of suit or proceedings within the

meaning of Section 14(1)(a) of IBC. As observed above, the application

under Section 11 (3) of MOFA is for enforcing statutory duty imposed

on the Component Authority. Just because the Promoter gets an

opportunity of hearing while deciding the proceedings, it does not

mean that those proceedings are �led for enforcing any obligation

against the developer. The statutory scheme of Section 11 of MOFA is

such that upon failure by the promoter to convey title within the period

prescribed, the conveyance can be sought from the Competent

Authority. Therefore, �ling of application under Section 11(3) of MOFA

is not akin to institution of suit for conveyance against the promoter. In

fact, a Suit seeking declaration of title can always be �led even after

issuance and registration of Certi�cate of unilateral deemed

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conveyance. The judgment therefore has no application to the issue

involved in the present case.

35) In my view, therefore mere initiation of CIRP against

Respondent No.4 cannot be a reason for Competent Authority not to

exercise powers under Section 11(3) of MOFA. The Competent Authority

has erred in not adjudicating the application of the Petitioner-Society

on merits. The impugned order dated 4 September 2025 is indefensible

and liable to be set aside.

36) The Petition accordingly succeeds, and I proceed to pass

the following order:

(i) Order dated 4 September 2025 passed by the

Competent Authority rejecting Application No. 87 of

2025 is set aside.

(ii) Application No. 87 of 2025 is restored on the �le of

the Competent Authority, which shall proceed to

decide the same on its own merits in an expeditious

manner.

(iii) Parties shall appear before the Competent Authority

on 1 July 2026 alongwith copy of the present order

downloaded from the website of this Court and secure

further directions for �xation of date(s) of hearing in

the Application.

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(iv) All rights and contentions of the parties on merits of

the Application are expressly kept open to be decided

by the Competent Authority.

37) With the above directions, the Writ Petition is allowed.

There shall be no order as to costs.

[SANDEEP V. MARNE, J.]

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NEETA

SHAILESH

SAWANT

Digitally

signed by

NEETA

SHAILESH

SAWANT

Date:

2026.06.22

19:08:06

+0530