Mumbai: Calling out a real estate developer’s “greed to make more profits”, the Bombay High Court last week dismissed its petition opposing the grant of deemed conveyance to a housing society in Vile Parle (West), ruling that builders cannot exploit additional Floor Space Index (FSI) arising from subsequent changes to development regulations.
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“This way, no developer would ever convey land to the organisation of flat purchasers and would continue to take benefit of further additional FSI made available due to change in FSI regime,” justice Sandeep Marne observed.
Conveyance is the transfer of ownership of the land and common areas from the developer or landowner to the cooperative housing society formed by flat owners. The ruling underscores a developer’s statutory obligation to convey the land to a housing society after its formation.
Ariisto Realtors Private Limited (ARPL) had moved the high court challenging an order passed by a District Deputy Registrar, Co-operative Societies, in July 2025, granting unilateral deemed conveyance of a 1,241.65 sq m plot to the Ariisto Cloud Co-operative Housing Society (ACCHS).
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In his July 17 order, justice Marne noted that ARPL opposed the grant of conveyance because it believed the Development Control and Promotion Regulations (DCPR) 2034, introduced in 2018, would allow it to construct an additional 841.16 sq m on the land.
The dispute stems from a 2010 development deed under which ARPL built a ground-plus-nine-storey building, Ariisto Cloud, near SV Road in Vile Parle (West). The project, comprising 12 residential flats, one commercial unit and two shops, received a completion certificate in 2015, after which the flat owners registered the ACCHS in 2016.
ARPL argued that the landowners, who had joined ACCHS as members, had colluded with other members of the society to defeat its right to exploit additional FSI on payment of ₹51,000 per sq m, as stated in the development agreement.
“The landowners are avoiding contractual obligations by enforcing conveyance in favour of the society acting in their capacity as members,” ARPL told the court. The builder had also questioned the District Deputy Registrar’s jurisdiction to pass the order granting conveyance to the society.
However, the ACCHS pointed to the development agreement executed under the Maharashtra Ownership of Flats Act, under which the builder had committed to convey the land to the society after all the flats in the building were sold. It said that the additional FSI claimed by the builder stemmed from a 2018 regulatory change, and that it was impermissible for the builder to deny conveyance on that ground.
Rejecting ARPL’s arguments, the single-judge bench held that the developer was “attempting to claim a right which never belonged to him in law”. The judge said the builder was statutorily required to convey the land and building to the society within four months of its formation. The additional FSI arising out of DCPR 2034, introduced in May 2018, belonged to the society, the judge added.
The court also questioned the developer’s motives behind opposing the conveyance granted to the society. ARPL “has already exploited the development potential in the land and has milked the profits out of the project. Its greed to make more profits is, however, not satisfied, and it wants to put up additional construction on the land because the new DCPR grants additional FSI,” it said.
The court also noted that neither the landowners nor the society wanted to further develop the land. “It is only the promoter who is attempting to earn a fortune by taking benefit of its own wrong, who is interested in putting up additional construction on the subject land. This court would not be a party to such devious acts of the petitioner of monetising something which belongs to the society,” it said.
