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HC curbs on builders

A cooperative housing society, not the developer, will have to initiate eviction proceedings before a cooperative court against members opposing redevelopment, the Bombay High Court has ruled.

mumbai Updated: Dec 11, 2009 01:42 IST
HT Correspondent

A cooperative housing society, not the developer, will have to initiate eviction proceedings before a cooperative court against members opposing redevelopment, the Bombay High Court has ruled.

Justice SC Dharmadhikari delivered the judgement last week in a case where land rights were not transferred to the developer.

“Increasingly, it is found that the developers and builders are approaching the court seeking eviction and dis-possession of non-cooperating members of cooperative housing societies,” the court observed in the case.

The court said in cases where the developer is only a contractor engaged by the society for redevelopment, he cannot directly approach the high court against non-consenting members and has no right to take action against them.

The court also ruled that members of a cooperative housing society—even if they are in a minority— could move the cooperatives court against redevelopment if they have objections. The court was hearing a petition filed by Sweety and Rajendra Agarwal, residents of Fardoon Apartments in Khar, who were opposed to the redevelopment of their building. The couple and two other members claimed that the developer, M/s Acknur Constructions Private Limited, had manipulated the redevelopment agreement.

Justice Dharmadhikari, in a 46-page judgment in this case where the developer prima facie had no land rights, held that the cooperatives courts will have to consider “valid” objections raised by members of a cooperative housing society even if they are in a minority.

In earlier judgements, where land rights had been transferred to the developers, the high court has said that a minority of non-consenting members cannot hold up the project. Senior advocate Girish Kulkarni said that the new judgement would prevent developers who try to step into the shoes of the society.

“Developers being mere contractors and do not have the right to seek injunction against a non-consenting member,” said Kulkarni. “This judgment will make the minority members, who are opposing the redevelopment for genuine reasons, stronger.”

Advocate Vinod Sampat, who handles disputes in cooperative societies, said that the new judgement is significant. “Often, developers collude with some members of the society and acquire the minimum majority required for approving the project,” said Sampat. “Although the project may not be in the larger interest of the society it is approved as it benefits a few.”

Realtors fear order may delay projects

Realty experts fear that the Bombay High Court’s decision that cooperative societies, not developers, can act against members opposed to redevelopment may delay projects.

Real estate experts say now obtaining consent in cases where land rights were not with builders will shift from the developer to the cooperative society.

“Developers will now ask the society office bearers to come with full consent and then talk it out,” said Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj (JLLM), a leading real estate consultancy firm. “The ultimate sufferers will be the residents who want to redevelop properties.”

Ramesh Prabhu, Chairman, Maharashtra Societies Welfare Association said that the judgement ejects the role of the builder who has been assigned developmental rights by society members. “It is the society which has to be in the forefront and not the builder as in the present conditions,” said Prabhu.

He said a competent authority should be appointed to ensure that the minority in opposition is given a chance to present its case and a decision be taken based on the merits of the case. There are at least 25,000 cooperative societies housing more than 50 lakh residents in Mumbai. Of these at least 10,000 societies—homes to 20 lakh people — were constructed 40 years ago and are in dilapidated condition. They are being considered for redevelopment.

Cluster redevelopment projects could also be affected by the recent judgement.

“It is next to impossible to get hundred per cent consensus,” said Mayur Shah, Managing Director, Marathon Group.