Third-party flat buyers have no rights once developer is removed, rules HC

The Bombay High Court ruled that third-party flat purchasers can't claim rights in a society's redevelopment after the developer's contract is terminated.

MUMBAI: The Bombay High Court has ruled that third-party purchasers who book flats through a developer cannot claim any rights in a co-operative housing society’s redevelopment project once the society terminates its contract with that developer.

Third-party flat buyers have no rights once developer is removed, rules HC

Justice Kamal Khata, dismissing a petition filed by a Kurla-based couple, said the law is clear that such purchasers cannot assert ownership, demand possession, or interfere in redevelopment. Their only remedy, the court held, is to seek damages from the ousted developer.

“The consistent view of this court is that purchasers claiming through a terminated developer cannot assert or enforce any rights against the Society or the newly appointed developer,” justice Khata said. “Their remedies, if any, are confined to claims against the erstwhile developer.”

The petitioners, Satish and Swapna Inamdar, had sought to restrain the Nehru Nagar Vidyut Vilas Co-operative Housing Society from proceeding with demolition, revising plans, or selling flats in the new building. They had booked flats through M/s Adit Enterprises, which was appointed for redevelopment before the society terminated its agreement in 2015. The termination was later upheld in arbitration.

The couple argued that the society, as owner of the land, should be treated as a promoter under the Maharashtra Ownership Flats Act (MOFA) and therefore bound to honour their flat bookings.

However, justice Khata rejected this, relying on a recent high court ruling in the Tuvin Constructions case. The court reiterated that neither the society nor the new developer can be treated as co-promoters for purchasers who derive their claim from a developer whose contract has been cancelled.

Finding no error in the Bombay City Civil Court’s refusal to grant interim relief, the High Court dismissed the petition.