Minority flat owners cannot stall redevelopment project: Bombay HC

MUMBAI: A few dissenting flat owners cannot stall a redevelopment project, the Bombay High Court has ruled in yet another order which comes to the rescue of the majority. RRB Realtors was forced to approach the HC when seven of the 36 members of a Chembur housing society backed out of the agreement they signed for redevelopment.

Last month, judge S J Kathawalla ordered their eviction if they did not vacate their premises peacefully. “In the event they do not hand over possession of the tenements to the court receiver as directed, the court receiver shall be at liberty to take forcible possession with police assistance,” said the order.

The case pertains to building No. 18 in Chembur’s Subhash Nagar Rajeshwari Co-operative Housing Society, built around 1954 by the then Bombay Housing Board (now Mhada). The structure has been described as “highly dilapidated and dangerous”. In 2004-05, the society unanimously decided to redevelop the property and appointed a builder, who failed to execute the project. As the building deteriorated, the society appointed RRB Realtors in 2009. Each member occupying a 180 sq ft tenement was promised 400 sq ft in the redeveloped building by the developer. They were also guaranteed Rs 11,000 a month rent each, plus a corpus of Rs 4 lakh for the society. All the 36 members (barring three flat owners who remain untraceable till date) signed agreements with the builder in 2010.

But changes in Mhada’s policy put on hold all redevelopment projects. The project finally took off in 2013, but the society renegotiated the agreement. The meeting was attended by all the available members including the seven dissenting ones, who took a leading role in re-negotiating the terms. “At the said meeting, it was decided to further enhance benefits to be given to the members including enhancement in the area of flats to be given to each member, corpus fund, monthly transit rent, and shifting charges. It was in this meeting that all the members unanimously resolved to modify terms of development,” said the developer’s petition.

A fresh agreement was signed with the builder now offering 450 sq ft to each member (it further increased to 480 sq ft), monthly transit rent of Rs 18,500 and corpus fund of Rs 5.40 lakh. Mhada gave approval in February 2014, the BMC gave construction permission in June 2015. The process of entering into individual agreements for permanent alternate accommodation with the members commenced on August 11, 2015.

The builder said instead of vacating the premises, the seven members filed a civil suit in the city civil court to cancel the agreement and appoint a new developer. The builder challenged this suit in the HC, stating they cannot be permitted to obstruct the project agreed to by majority members. “In fact, they (dissenting members) had accepted the redevelopment and also executed individual agreements. The stand now taken by them is clearly illegal and an after-thought,” said the builder.

“The petitioner has spent crores of rupees on the redevelopment project and 26 members have shifted to temporary alternate accommodations long back. They were paid part corpus fund, advance rent for 12 months, shifting and brokerage charges as agreed under the Development Agreement dated July 15, 2013,” said the developer.

The court said facts placed before it established that the dissenting members were kept informed about the project’s progress and belied their submission made that the development agreement was executed without informing them. It ordered them to vacate the premises and directed the builder to allot their new flats once the construction is over.

Credits ET Realty

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