The law of the land makes it mandatory for specific documents to go through the process of registration, still in case unregistered, it allows these documents can be used for the purpose of evidence. Would this be interpreted in a way to make things happen without the need register?

Case Study: Raj Developers had built Savitri Sadan building at Bhayander on a tract of land under cooperative ownership of eight members of the Thakkar family. The builder was not able to set up the society. Following this, shop owners and home buyers then set up a society all by themselves devoid of the builder’s support. Its registration was done in March 1994 in the name of Savitri CHS.

Subsequently the society sought to get transference of the land and building. Since the builder did not carry out the transfer, the society lodged a complaint with the Thane District Forum against the builder and eight members of the Thakkar clan who were owners of the building plot.

The forum ruled that there was no agreement concerning the transfer of the title from the land owners to the builder and neither was there any registered development agreement that empowered the builder to erect the building and sell the apartments. The forum decided that while the developer has no distinct title, he is not authorized to transfer the title to the society. Therefore, the forum deemed denial of the order execution of the transfer. So the complaint was declined.

The society petitioned against this mandate. It argued that the Maharashtra Ownership Flats Act, typically had provision for unregistered agreements to be approved in evidence.

The Maharashtra State Commission held that the issue did not relate to the document being registered or not, rather, it was linked to the builder’s right to construct the building and sell the apartments. No documentary evidence existed to prove that the builder had bought the land or the land owners had given him the right to sell the respective flats. Thus, when the builder himself has no right, he is not in a position to create an additional right to support the society.

In this situation, the Commission decided that it lacked the authority to instruct the flat owners or the developer to execute conveyance. By its order (15.1.2017) ruled by Justice Bhangale for the Bench supported by member D R Shiraso, the State Commission restated the perspective communicated by the District Forum, and rejected the society’s appeal.

Conclusion: Home buyers must ensure if a builder can exercise the right to construct a building and sell flats. An undeclared and undocumented understanding between the land owner and builder would not suffice. The essentials are that there must be a documented contract between the land owner and the builder. In case no such agreement exists, the home buyers would have no right whatsoever to the house purchased by them. So the sole alternative available would be to ask for a refund of their money apart from remuneration and expenses.

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