Brief Overview:

Pendency of Corporate Insolvency Resolution Process (CIRP) and operation of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not bar grant of deemed conveyance under Section 11 of Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act. Bombay High Court has held that statutory obligations of the promoter to convey title to a housing society continues despite insolvency proceedings.

Technical Details:

Deemed conveyance proceedings are not hit by the bar of moratorium under Section 14 of IBC, as they do not constitute recovery or enforcement of a monetary claim. Bombay High Court has held that District Deputy Registrar, Co-operative Societies, Mumbai City (4) and Competent Authority (Competent Authority) exercises a statutory function to perfect title in favour of flat purchasers, and such function continues notwithstanding CIRP.

It has also been clarified that the obligation to convey under Section 11 MOFA is a statutory duty, and the promoter is effectively divested of title once flats are sold and the society is formed. Accordingly, grant of deemed conveyance does not amount to “transfer of assets” of the corporate debtor.

JC Takeaways:

Deemed conveyance proceedings are non-monetary and fall outside the bar of Section 14 IBC, preventing promoters from using the moratorium as a shield to delay statutory obligations. Housing societies can independently secure title without recourse to NCLT, strengthening their position in redevelopment scenarios.

For further details, please see:

Darshan mandir Co-Operative Society vs District Deputy Registrar, WP. 16318 of 2025.pdf

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