Fraudulent Flat Purchases: A Cautionary Tale

Case Story No. 2/2025

"Fraudulent Flat Purchases: A Cautionary Tale"

Dated 08/03/2025

Today I am giving a detailed review of the case of my client, Mr. Anil Vengurlekar (Fictitious Name), which includes the fraud committed in the flat purchase transaction, technical hurdles created due to redevelopment, and the legal battles.

Case Introduction

Initially, a person named Mr. Maqbool Khan (Fictitious Name) had a 225 sq ft flat in the name of his mother, which was owned by the MHADA Authority. Since both the parents had passed away without any heirs, Maqbool Khan had to go through legal proceedings to acquire the right to the property. Maqbool Khan did not have enough money to cover the expenses required to acquire the right to the property.

Maqbool Khan sought help from a real estate agent, Mr. Shetty (Fictitious Name), who brought forward Mr. Anil Vengurlekar as the buyer.

Implementation of MOU

A Memorandum of Understanding (MOU) was prepared between Mr. Maqbool Khan and Mr. Anil Vengurlekar. As per the terms of the MOU:

1.     Mr. Anil Vengurlekar agreed to pay Rs. 25 lakhs, some of which was required to transfer the property to Mr. Maqbool Khan and some of which was required to repay the loan taken.

2.     Mr. Maqbool Khan gave possession of the flat to Mr. Anil Vengurlekar and entered into a Live and License Agreement for the security of Mr. Maqbool Khan.

3.     Once the property was transferred in the name of Mr. Maqbool Khan, he would register a sale agreement with Mr. Anil Vengurlekar.

Mr. Anil Vengurlekar paid the money as per the terms of the MOU, and took possession of the flat.

Unexpected opportunity for redevelopment:

Mr. Maqbool Khan obtained a Letter of Administration from the High Court on the basis of the amount received from Mr. Anil Vengurlekar and transferred the property in his name. At the same time, the society of the building in which the room was located decided to redevelop it. As per the terms of the redevelopment, Maqbool Khan was to get a new flat of 600 sq ft in place of 225 sq ft.

The benefits of redevelopment changed Mr. Maqbool Khan’s attitude. Mr. Shetty also persuaded him to consider this benefit, as he was also to get a commission.

Legal complications: Impact of Rent Act

Mr. Maqbool Khan and Mr. Anil Vengurlekar had prepared a Live and License Agreement to give possession of the flat, due to which Mr. Anil Vengurlekar was officially using the flat. But, in the process of redevelopment, the society asked all the members to vacate their flats.

Now, Mr. Maqbool Khan claimed that due to the Live and License Agreement, Mr. Anil Vengurlekar had the rights of a tenant, and he would have to vacate the flat under the Maharashtra Rent Control Act. This further complicated the matter.

1.     Tenant’s rights: Mr. Anil Vengurlekar could be considered a tenant due to the Live and License Agreement, but he had transacted as per the MOU, which made him claim rights as a buyer.

2.     Obstruction of redevelopment: While the society had ordered the vacation of all the flats, the issue of whether Mr. Anil Vengurlekar had the right to occupy the flat came up in court.

3.     Delay in registration of agreement: Mr. Maqbool Khan was reluctant to register the sale agreement as per the MOU, leading to Mr. Anil Vengurlekar claiming fraud.

Fraud exposed

Mr. Despite the payment of Rs. 25 lakh by Anil Vengurlekar, the sale agreement was not registered in time. Mr. Maqbool Khan and Mr. Shetty deliberately delayed the transaction due to redevelopment. Finally, Mr. Anil Vengurlekar filed a case in the Bombay Civil Court under the Specific Relief Act, 1963, in which he claimed:

1.     Maqbool Khan should register the sale agreement as per the MOU.

2.     He has paid Rs. 25 lakh, therefore he is entitled to the flat after redevelopment, and also to the rent, transport charges, corpus fund to be paid by the redeveloper.

3.     Mr. Maqbool Khan and Mr. Shetty have fraudulently breached the contract.

Judicial Conflict

In this case, the court needs to consider the following issues in detail:

1.     Legal validity of the MOU: Have the conditions mentioned in the MOU been fulfilled?

2.     Effect of Rent Act: Can the rights of Mr. Anil Vengurlekar be treated as tenants due to the Live and License Agreement?

3.     Fraud and Breach of Contract: Have Mr. Maqbool Khan and Mr. Shetty deliberately delayed the transaction?

Conclusion

This case is not just an example of a flat purchase transaction, but an example of how legal technicalities can be misused. My client, Mr. Anil Vengurlekar, is fighting for his rights. The outcome of this case will not only vindicate his rights, but will also create a legal precedent for future such incidents. Therefore, legal advice should always be taken in the transaction of purchase and sale. The exchange should be done according to the advice of experts. So that the transaction is completed smoothly.

For more information:

Adv. Vishal Gade.

High Court, Bombay,

Mr. Iconic Legal Services

Mo. No. 9987112056

 

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