Bombay High Court Orders Costs Against Non-Consenting Members in Cooperative Housing Society Redevelopment

August 1, 2024

The Bombay High Court expressed frustration over non-consenting members of a Cooperative Housing Society refusing to vacate their flats, despite a Development Agreement being approved by the majority of the Society’s members.

Justice Arif S. Doctor noted, “The court’s docket remains overwhelmed with numerous cases where minority members persist in obstructing redevelopment efforts on grounds that are clearly frivolous, baseless, and contrary to established legal principles.”

Respondents 2 to 11 argued that the petitioner was attempting to evade obligations under the Development Agreement by seeking an exemption from the Permanent Alternate Accommodation Agreement (PAAA) with them. However, the High Court dismissed this argument, noting that the petitioner’s request was intended to avoid delays in securing the commencement certificate, which were caused by uncooperative members who were refusing to sign the PAAA.

The respondents also argued that continuing with the redevelopment would violate a City Civil Court order that had issued an injunction against respondents No. 1 and No. 3, prohibiting them from creating any third-party rights concerning Flat No. 08 in the B Wing. However, the Court dismissed this argument, clarifying that the injunction only prevented the creation of third-party rights in Flat No. 08 of the B Wing and did not prohibit the redevelopment of the building.

The High Court observed that the majority of the society members (respondent no. 1) approved the resolution for the redevelopment of a dilapidated building. The Court noted that there were no court or authority orders preventing the enforcement of this resolution.

The Court referred to the case of Girish Mulchand Mehta vs. Mahesh S. Mehta (AIR Online 2009 Bom 1), where the Bombay High Court’s Division Bench had held that resolutions passed by a Housing Society’s General Body are binding on all its members. Minority members who oppose the redevelopment cannot unilaterally object, as their proprietary rights are subordinate to the society’s authority. Members are bound by the General Body’s decisions.

The Court highlighted that the non-vacation of flats by respondents nos. 2 to 11, despite the Development Agreement, jeopardizes the redevelopment plan. It remarked, “Such conduct by non-consenting minority members has detrimental effects as it prejudices the entire society and risks the redevelopment.”

The Court noted that “frivolous and misguided opposition by a few members” imposes significant financial strain on the developers. Such behavior by minority members undermines the redevelopment plan intended to benefit all society members.

Regarding costs, the Court stated, “Considering the frivolity of the defense and the well-settled legal position, while also considering the age of the members of Respondent No. 1 Society, I find it appropriate to award costs.”

The Court ordered respondents nos. 2 to 11 to pay ₹5,00,000 in costs to the petitioner and respondent no. 1 if they fail to vacate their flats within two weeks from the date of the order.

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