Bom HC | Can a development agreement signed between Chairman of Society and one of the Managing Committee members be binding upon non-signatory? Court discusses while ordering redevelopment of building

Bombay High Court: G.S. Patel, J., in its opening remarks, expressed with respect to the present matter that:

This is the usual story of a solitary member of a society obstructing the redevelopment of the society building.

 It does not matter to this member that the building is in a dilapidated condition unfit for human habitation.

It does not matter to him that the building has been declared as such by the Planning Authority and categorized as a ‘C1’ building.

It does not matter to that dissenting member that the building now poses a risk to all occupants — including the dissenting himself — and, in addition, others in the vicinity.

It also does not seem to matter to this member that his actions come at the very real cost of other member of the society.

Persistently the respondent has been obstructing the redevelopment work for the past 6 years—which is beyond shocking! 

Further, the Court elaborated that respondent 2 imagines that it is only he who can tell right from wrong, that it is only he who knows what is good for all, and that he is entitled without any assumption of liability to continually obstruct the redevelopment, put his fellow members at risk and continue in this fashion.

With respect to declaring the redevelopment agreement null and void, whether the respondent 2 obtained any order at all? The answer that the Bench received was ‘not yet’.

Stating that respondent 2 is wrong on every single aspect of the matter, Bench added that he is entirely in error in believing that no action could be taken and that he was protected or insulated from the operation of law.

Factual Matrix

 In the present matter, respondent 1 society had 20 tenements and the only tenement that is still in occupation was respondent 2. In 2014, the Society resolved to for redevelopment, followed by a redevelopment agreement, under which a provision for arbitration was included, as per which any disputes were to be referred to arbitration.

The said property was located on MHADA Land. Municipal Corporation of Greater Mumbai declared the said building in the ‘C1’ category, i.e. as unsafe and unfit for human habitation.

As per the Court’s understanding the said proposal for redevelopment was for some ‘illegal’ reasoning.

Submission

Point that was urged was that the building was meant for persons from lower-income group and hence permission of or from the Social Welfare Department was essential and was a requirement. Not having been obtained the permission the entire agreement was illegal, null and void.

But it was not shown how SWD was a ‘Planning Authority’ under the town planning statute or that it has the power to veto, stop or stall any development or re-development project.

MHADA had passed an order with respect to the stated obstruction by respondent 2 under Section 95A of the MAHADA Act, in October 2018.

Mr Singh for the developer made a statement that Kondvilkar at all times will be treated at parity with all other members of the society and won’t be denied a single benefit of re-development. He will be put in possession of his allotted flat in the redeveloped building after the occupation certificate has been obtained.

Bench elaborated with regard to the Society’s general body resolution that, it is simply not possible for a member of the society to disobey, disavow or flout openly taken decisions of the general body of the very society of which he claims to be a member.

Can a development agreement which was signed between the Chairman of the Society and one of the Managing Committee members be binding upon a non-signatory i.e. Kondvilkar?

 While analysing the facts and circumstances of the present matter, Court cited the Bombay High Court decision in Aditya Developers v Nirmal Anand Co-op. Hsg Soc Ltd., 2016 SCC OnLine Bom 100, where it was observed that:

 “21. It is to be noted that once the person becomes a member of the Co-operative Society he loses his individuality with the Society and has no independent rights except which is given to him by the statute and bye-laws. Hence, objection raised by the respondent nos.3, 4, 6 and 7 that there is no privity of contract between them and petitioner, is not maintainable.

In Court’s opinion, the decision of Sarthak Developer’s v. Bank of India Amrut-Tara Staff CHSL, Appeal (L) No. 310 of 2012, provided a complete answer in the present case. Hence, all the decisions by Mr Singh are binding and are apposite.

If it’s suggested that Girish Mulchand Mehta v. Mahesh S Mehta, 2009 SCC OnLine Bom 1986, was a case of tenants, then that argument fails once we see that it has been used again and again in cases involving members of a cooperative society — including Sarthak Developers

What does Kondvilkar want?

Bench noted that he was unable to articulate it beyond saying “the law must be followed.”

Further, the High Court added that Kondvilkar will bend the knee to the law and to this Court’s judgment.

There is not a vestige of a defence in law, on facts, in equity or in justice

 On the reconstruction of the building and after obtaining the occupation certificate when all other members are put in possession, the 2nd Respondent will also be given possession of his allotted premises.

Further, the High Court held that:

Any attempt by the 2nd Respondent to obstruct the Court Receiver’s department from taking possession, either by fling complaints or otherwise, will be treated as an act of Contempt of Court and will be dealt with as such.

[Chirag Infra Projects Pvt Ltd v. Vijay Jwala Coop. Hsg Soc Ltd., 2021 SCC OnLine Bom 364, decided on 12-03-2021]


Advocates before the Court:

Mr Amogh A Singh, with Bhavin R Bhatia, Rohit Yadav & Moksha M Doshi, for the Petitioners.

Mr Amol Joshi, with Vinod Rane, i/b Rane & Co, for Respondent No.1.

Ms Divya B Parmar, for Respondent No. 2.

Join the discussion

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.