'Housing Societies Cannot Be Denied Proportionate Land Conveyance Due To TDR Use': Bombay HC

Mumbai, June 27: The Bombay High Court has held that housing societies in large residential layouts cannot be denied proportionate land conveyance merely because the developer has used Transferable Development Rights (TDR) in the project.

The court clarified that where TDR is distributed across all buildings in a layout, societies are entitled to proportionate conveyance of land based on the built-up area of their buildings.

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Justice Sandeep Marne dismissed a petition filed by Neelkanth Mansions & Infrastructure Pvt Ltd challenging an order granting deemed conveyance of 929.84 sq m of land to the Neelkanth Greens Row House Cooperative Housing Society in Thane.

The developer had argued that since TDR was used in the project, a 2018 Government Resolution (GR) permitted conveyance of only the plinth and appurtenant area, and not proportionate land.

Court Rejects Developer's Argument

The society, on the other hand, contended that the TDR had been utilised across the entire layout and not for any particular building, making proportionate land division appropriate.

Rejecting the developer's contention, the court observed that the 2018 GR should not be interpreted mechanically to deny societies their legitimate land rights.

"The procedure prescribed in para-2(C)(vi)(2) cannot be mechanically applied to deny proportionate land conveyance merely because some TDR is used in the layout," Justice Marne said.

The court explained that the provision limiting conveyance to the plinth and appurtenant area was intended only as a temporary solution in cases where TDR usage created an imbalance in land allocation between different buildings.

It further noted that in the present case, the developer had not loaded TDR on any one building but had distributed it across the entire project.

HC Clarifies Scope Of GR

"In the present case, therefore, it is not necessary to restrict the conveyance only to the plinth area and appurtenant land, and the society can be granted conveyance of land proportionate to the built-up area utilised in its building," the court said.

The judge also cautioned against allowing developers to misuse the provision to retain ownership of valuable land.

"It is not the objective behind the incorporation of para-2(C)(vi)(2) in the GR to deny conveyance of due land to the organisation of flat purchasers or to ensure retention of ownership of land with the developer," the judgment said.

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The court observed that if developers were allowed to retain unconveyed land merely by using some TDR, they could continue to benefit from future increases in permissible Floor Space Index (FSI) at the cost of flat purchasers.

Finding no error in the order of the Competent Authority granting deemed conveyance, the High Court dismissed the petition, holding that the society had received only the land to which it was lawfully entitled.

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