Can minority members of a Society act against will of majority members and foist delay in commencement of redevelopment work of Society? Bom HC addresses

Bombay High Court

Bombay High Court: Observing that, a developer who has been appointed by the Society and who is eager to proceed with the redevelopment, was in some manner left baffled and dragged into litigation, G.S. Kulkarni, J., held that, non-cooperating members cannot foist a delay on the builder and the society in the commencement of the redevelopment work resulting in the project costs being increased every passing day.

A redevelopment of a 50-year-old dilapidated building of respondent 1 Co-operative Housing Society and the obstruction for such redevelopment by respondents 2 to 4 concerning their four units was the subject matter of the present proceedings filed under Section 9 of the Arbitration and Conciliation Act 1996.

Out of 30 members, 26 members have already vacated the society.

Society considering the dangerous condition of the building had taken up the issue of the urgent need for the redevelopment of the building. Further, the Society took steps to find out a suitable developer. An ‘Annual General Meeting’ was convened wherein by majority of the members it was resolved to appoint the petitioner as the developer.

Thereafter, a further Annual General Meeting of the Society was held in the presence of the officers of Maharashtra Housing Area Development Authority (MHADA). In such meeting, a decision was taken to appoint the petitioner as a developer to undertake the redevelopment of the Society’s premises, was confirmed.

Later, a Development Agreement was executed between the petitioner and the Society. Being appointed as a developer the petitioner, took steps so that the redevelopment work could commence.

Respondents 2,3 and 4 vacated and /or obstructed the redevelopment. They caused hurdles and impediments to the redevelopment work which according to the petitioner and the society caused serious prejudice to the members who had already vacated and who were eagerly awaiting the redevelopment work.

City Civil Court granted a temporary injunction restraining the society and the petitioner in taking any further steps qua the redevelopment of the Society’s building and from disturbing respondent 2’s possession.

Analysis, Law and Decision

Settled Position of Law

The minority members cannot act against the will of the of the majority members of the society and obstruct the redevelopment.

High Court observed that respondents 2 to 4 cannot take a position opposing the redevelopment, which was for the beneficial interest of all the members of the society. They cannot cause suffering to the other members who have already vacated.

“…cannot foist a delay on the petitioner and the Society in commencement of the redevelopment work resulting in the project costs being increased every passing day which would be immensely prejudicial to the petitioner as also the society.”

Further, the Bench added that,

“Respondents no 2 to 4 appear to be carrying an approach that as their residential units in the redevelopment are certainly secured, however the situation of the building going for redevelopment can be exploited to coerce the society and the petitioner for something, which prima facie appears to be, is beyond their normal entitlement. Such an approach is deleterious and detrimental to the majority members of the Society.”

Elaborating further, the High Court noted that, the redevelopment needs to proceed in a manner as agreed between the Society and the Developer and as per the sanction/ approval of the majority members.

In Court’s opinion, it is high time that the members realise that while they raise their grievances, such grievances are really genuine and not of a nature which would unwarrantedly obstruct and delay the proposed redevelopment.

“There needs to be a safeguard against unscrupulous persons who raised frivolous grievances. If such obstructing persons/members fail in proceedings, they would be accountable to the Society for the delay they are causing by such obstructive approach, based on the principle that once a person becomes a member he loses his individuality and has no independent rights except those given to him by the statute and the bye-laws.”

Respondents 2,3 and 4 had already adopted legal proceedings against the Society and the petitioner/developer.

In view of the above discussion, respondents 2,3 and 4 had no right to delay, defeat and prejudice the redevelopment by not vacating their respective units. The petitioner made out a strong prima facie case. [Choice Developers v. Pantnagar Pearl CHS Ltd., 2022 SCC OnLine Bom 786, decided on 13-4-2022]

Advocates before the Court:

Mr. Rajiv Singh a/w. Omprakash Jha, Basu, Gaurav i/b. The Law Point for the petitioner.

Mr. Siddharth a/w. Garima Mehrotra for respondent no. 1-Society.

Mr. A.M. Saraogi for respondent nos. 2 and 4.

Mr. S.L. Mhatre for respondent no. 3. 

Join the discussion

Your email address will not be published.

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