TDR cannot become an excuse to hold back conveyance

One of the most common positions taken in deemed conveyance disputes is this: once TDR has been used in a layout, the society can be given only the plinth and appurtenant area, and nothing more.

The Bombay High Court has now made it clear in the Neelkanth judgment that this argument cannot be applied mechanically.

In Neelkanth Mansions & Infrastructure Pvt. Ltd. v. District Deputy Registrar, Co-operative Societies, Thane & Ors., decided on 25 June 2026, the Court dealt with a layout project in Thane where the developer resisted deemed conveyance on the ground that TDR had been used in the project. The society, which represented 12 row houses with an occupancy certificate issued in 2007, had sought deemed conveyance of 929.84 sq. mtrs., including proportionate plot area and proportionate recreational ground area. The Competent Authority granted that relief, and the developer challenged it.

The developer’s case was based on the Government Resolution dated 22 June 2018. The submission was that since TDR of 24,950.45 sq. mtrs. had been utilised in the layout, conveyance could be granted only of the plinth and appurtenant area.

The High Court did not accept that approach. Hon’ble Justice Sandeep V. Marne held that the provision dealing with TDR cannot be read as an automatic bar against proportionate conveyance in every case where TDR is used. The Court explained that the real issue is whether the use of TDR creates an imbalance in land allocation between buildings in the layout. If it does, then restricting conveyance may operate as a temporary solution. But if it does not, there is no reason to deny a society its proportionate share of land.

That distinction mattered in Neelkanth. On the facts, the TDR had not been loaded onto one particular building. It had been distributed across all buildings in the layout. The architect’s certificate showed that the row house society’s built-up area was 1,640.40 sq. mtrs. out of a total built-up area of 95,785.75 sq. mtrs., giving it a 1.71% share. On that basis, its plot area share was calculated at 788.63 sq. mtrs., and its proportionate share in the recreational ground area was 141.21 sq. mtrs., aggregating to 929.84 sq. mtrs.

The Court therefore held that there was no difficulty in following the principle of proportionate land division. Since TDR was spread across the project and had not created any distortion in entitlement, the society could not be restricted to only plinth and appurtenant area.

What makes this judgment important is the Court’s clear recognition of the misuse that can happen if the rule is read too broadly. The judgment records that a developer cannot use the TDR provision as a way to retain land that ought to go to the society. It also notes the obvious commercial risk in such a position: unconveyed land may later become a source of additional FSI or development benefit for the developer. The Court made it clear that this was never the purpose of the 2018 Government Resolution.

The Court went a step further and laid down a practical rule for future cases. It held that the first endeavour of the Competent Authority should be to divide and convey land proportionate to the built-up area utilised in each building. Restricting conveyance to only plinth and appurtenant area should be the exception, not the rule, and should be adopted only in rare cases where the use of TDR or incentive FSI makes proportionate division impossible or unfair.

For those working in real estate, this is a useful and balanced judgment. It does not say TDR is irrelevant. It says TDR has to be examined in context. The legal question is not simply whether TDR was used, but how it was used, and whether that use actually affects fair land allocation in the layout.

In my view, Neelkanth is an important reminder that planning tools cannot be used to defeat conveyance rights. Where TDR is distributed across the layout and does not create an allocation problem, a society’s claim to proportionate conveyance remains intact. That is the real takeaway from this judgment.