Pankaj Bajpai

New Delhi, February 11, 2022:  While noticing that a decision to redevelop the buildings was taken way back in the year 2011 by the Co-operative Society (Appellant) and the members of the society occupying the dilapidated conditioned buildings had been risking their own lives, the Supreme Court has directed the Developer (Respondents) to complete the redevelopment project within the agreed period of five years and has granted two months’ time to the members to vacate the premises and handover the possession for such purposes. 

A Division Bench of Justice Abhay S. Oka and Justice Ajay Rastogi also made it clear that if the developer or the Society commit any breach of the undertakings given to this Court or any breach of directions of this Court, then the members can always move the Court for appropriate relief for enforcement of the undertakings and directions issued by this Court.

The observation came in reference to a dispute about the redevelopment of the buildings occupied by the members of Kamgar SWA Sadan Cooperative Housing Society (Appellant) in accordance with Regulation 33(7) of the Development Control Regulations for Greater Mumbai, 1991 applicable to the Municipal Corporation of Greater Mumbai.

Going by the background of the case, in the Special General Body Meeting of the appellant Society, a resolution was passed resolving that the tender submitted by the builders (one of the respondents) for the redevelopment of the property of the Society should be accepted. However, the appellant’s stand was that the resolution was unanimously passed. It was alleged that out of 240 members of the Society, 165 were present in the meeting wherein, an agreement for development was executed, which provided for allotment of premises in the redeveloped buildings free of cost on ownership basis to all the eligible members of the Society. In addition, the developer (one of the respondents) agreed to provide a corpus of Rs.5,00,000  per member to the Society.

The members of society (respondents) however filed a revision application u/s 154 of the Maharashtra Cooperative Societies Act, 1960 for challenging the permissions issued by the Assistant Registrar of Cooperative Societies. The Revisional authority allowed the revision application, which was then challenged by the Society before the Bombay High Court, but stayed by interim order. The members of the society then filed a suit contending that the resolutions passed in the Special General Body Meetings were illegal, being contrary to provisions of law and the Guidelines framed by the State Government. Another prayer was made for a declaration that the tender process conducted by the Society for appointing a developer for redeveloping its property was illegal. 

The Society thereafter, took out a Notice of Motion in the suit contending that the jurisdiction of the Civil Court was barred in view of Section 91 of the 1960 Act and the Cooperative Court will have exclusive jurisdiction to entertain and decide the dispute in the suit. The Trial Judge after hearing the parties, held that the suit was not barred by Section 91 of the 1960 Act and was maintainable in Civil Court. Hence, present appeal. 

After considering the submissions, the Top Court observed that adequate safeguards had been provided to the members of the Society in the undertaking filed by the builders and the Society had undertaken to abide by the terms and conditions proposed by the builders. 

Moreover, a direction could be issued to the Society to incorporate the same terms and conditions as agreed by the builders in the event the Society would be required to engage another developer, added the Court. 

Speaking for the Bench, Justice Oka found that the stand of the members of Society was that, considering the recent enhancement in FSI, the area offered should be more and that the development work should be entrusted to another builder as the previous developer does not have adequate experience. 

It was apparent that the buildings were in a dilapidated condition and the members of the Society were risking their own lives by occupying the same, and therefore, if something went wrong with the buildings, a large number of families of the members would be on the streets, added the Bench. 

Justice Oka noted that though a decision to redevelop the buildings was taken way back in the year 2011 by the Society and though an agreement was executed on December 27, 2012 appointing a developer, no progress was made in the development work as a handful of members of the Society out of 236 members were opposing the project of development undertaken through the builder. 

The enormous delay in disposal of the suit and appeals arising therefrom would cause prejudice and harm to the members of the Society as they would have to continue to stay in tenements in the buildings which have been in very bad shape, and therefore, this Court could not countenance a situation that would delay the development work for an inordinately long time due to the objection by a handful of members.

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