Dissenting Flat Owners Cannot Stall Redevelopment Project By Withholding Consent: Bombay High Court

On 18 June, the Bombay High Court held that dissenting members of a co-operative housing society cannot stall an approved redevelopment project by refusing to execute consent declarations required under a redevelopment agreement, observing that the collective will of the society, and not the wishes of individual members, governs such projects.

Justice Amit Borkar granted interim relief to Wadhwa Estates and Developers (India) Pvt. Ltd. and directed the dissenting members of Moon Craft Apartments Co-operative Housing Society to furnish the requisite declarations, while also restrained them from creating third-party rights in their flats but declined to direct them to vacate the premises immediately or appoint a receiver to take possession. He held:

“Therefore, redevelopment cannot proceed on the basis of consent of every individual member in every case. The law recognises the reality that collective decisions must govern such matters. Otherwise, even a single member may prevent implementation of a project desired by the overwhelming majority."

The dispute arose from the redevelopment of Moon Craft Apartments Co-operative Housing Society at Bandra (West), Mumbai.

The society resolved to redevelop the building in December 2021 and appointed Wadhwa Estates as the developer in May 2023. After the majority of members approved the proposal, the parties executed and registered the Development Agreement on 31 March 2025.

Clause 17.2 of the Development Agreement required members to execute Consenting Members Declarations after the developer obtained the MDP IOD, which triggered the next contractual stage of the redevelopment.

The developer obtained the approval on 5 March 2026 and called upon the members to submit the declarations. While 32 of the 38 members complied by 24 March 2026, six members refused.

Wadhwa Estates then approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, contending that the redevelopment proposal had been validly approved and that the refusal of a handful of members to furnish the declarations had stalled the project.

The dissenting members argued that they had not signed the Development Agreement, that Wadhwa Estates had filed the petition prematurely and that no obligation to vacate their flats had yet arisen.

The Court held that co-operative societies function on the principle of collective decision-making and that redevelopment affecting the entire building cannot depend on the wishes of individual members. It observed that once the General Body validly approves a redevelopment proposal, the decision binds all members unless a competent forum sets it aside.

It noted that the contractual obligation to furnish the declarations arose once the developer obtained the MDP IOD. It also held that Clause 17.2 expressly contemplated non-cooperation by members and authorised legal proceedings against dissenting members, demonstrating that the developer could seek judicial intervention even at the declaration stage. The Bench observed:

"Where the agreement itself lays down a procedure for redevelopment, neither the Court nor the parties can skip one stage and directly move to a later stage. Unless there is some compelling reason in law, the sequence agreed between the parties must be followed."

The Court rejected the allegation of collusion, holding that the society and the developer had acted properly in jointly supporting implementation of the redevelopment project. It also rejected objections based on speculative future contingencies, including possible delays, insolvency and future disputes, holding that parties cannot obstruct redevelopment on hypothetical concerns.

However, the Bench held that the obligation to vacate the flats arises only at a later contractual stage. As the developer had not yet obtained the Full IOD contemplated under the Development Agreement, the Court declined to grant possession-related reliefs.

Accordingly, the High Court directed the dissenting members to execute and furnish the Consenting Members Declarations and restrained them from creating third-party rights in their flats. It, however, declined to direct them to vacate the premises immediately or appoint a receiver to take possession.

Appearances for petitioner (Wadhwa Estates and Developers (India) Pvt. Ltd.): Advocates Mayur Khandeparkar, Tushar Guujar and Deep Madnani.

Appearances for respondent (Moon Craft Apartments Co-operative Housing Society Ltd.): Advocates Shanay Shah and J.R. Vakil.

Appearances for respondent (Sajida Ul Haq and connected respondents): Advocates Aurelius D'Silva and Reema Maurya.

Appearances for respondent (Muthar Shaikh and connected respondents): Advocates Abhinav Chandrachud, Altaf Khan, Akash Mangalgi and Janay Jain.