Individual Members Can't Stall Housing Society Redevelopment: Bombay High Court Reaffirms

The Bombay High Court has held that an individual member of a cooperative housing society cannot refuse to vacate her flat and delay redevelopment after the society has approved the project and executed a development agreement.

Justice Sandeep V. Marne reiterated members are bound by the development agreement signed by the society.

"The individual members of the Co-operative Society are bound by covenants in the Development Agreement executed by the Society with the Developer and individual rights of a member are subservient to the obligations of the Society under the Development Agreement.", it said.

The case concerned the Tilak Nagar Mahalaxmi Co-operative Housing Society in Mumbai. The building was originally constructed by MHADA and had 36 tenements. With MHADA's permission, 26 additional flats were later constructed.

The society thus had 62 flats in total. In April 2023, the society resolved that the additional area from redevelopment would be shared equally among all members. The resolution was not challenged.

The society later appointed Real Infrastructure Company as the developer and executed a development agreement. Under the agreement, each member was to receive 315 square feet of additional area, regardless of the size of the existing flat. All members vacated their flats except one.

The member who did not vacate claimed she was entitled to more area because her existing flat was larger. Her refusal stalled the redevelopment. The developer approached the High Court under Section 9 of the Arbitration and Conciliation Act seeking interim relief.

The member opposed the plea and said her entitlement dispute had to be decided first.

The court rejected this submission. It held that disputes over entitlement cannot be decided in proceedings under Section 9 of the Arbitration Act. Such disputes must be raised before the Cooperative Court or in appropriate civil proceedings.

“It is also equally well settled that mere existence of disputes between the members and the Society about their entitlements flowing out of redevelopment process cannot be a ground for the Court not to make interim measures directing vacation of premises in exercise of power under Section 9 of the Arbitration Act,” the court said.

The court also examined a MHADA offer letter dated December 27, 2024, issued under Regulation 33(5) of the Development Control and Promotion Regulations, 2034. The letter sanctioned additional FSI only for the original 36 MHADA tenements. The 26 additional flats were not considered for grant of additional FSI. On a strict reading, the court noted that the respondent's flat was not entitled to any additional area.

“If the offer letter dated 27 December 2024 is to be strictly construed, Respondent No.2 is actually not entitled to even an inch of additional area,” the court observed.

The court noted that despite this, the society had decided to share the additional area equally among all 62 members. This ensured the respondent would receive 315 square feet in the redeveloped building. The court recorded that 25 of the 26 additional flat occupiers had accepted this arrangement.

“This, in my view, otherwise represents a fair bargain for Respondent No.2,” the court said.

The High Court allowed the petition and directed the homeowner to hand over vacant possession of her flat. It clarified that the respondent was free to pursue her entitlement claims separately, but the redevelopment could not be stalled for that reason.

For Petitioner: Advocate Pramod Bhosle, instructed by Advocate Devika Nigde.

For Respondent No.1 (Society): Advocate Anshul Kochar.

For Respondent No.3: Advocate Himanshu Rai, with Advocate Harishchandra M. Margaje.