Dissenting Members Cannot Block Redevelopment by Withholding Declarations: Bombay HC

The Bombay High Court has affirmed that while minority members of a cooperative housing society cannot stall a validly approved redevelopment project by withholding consents, the developer cannot seek their premature eviction before fulfilling specific contractual milestones. In a balanced ruling, a single-judge bench of Justice Amit Borkar clarified the distinction between the obligation to cooperate at the declaration stage and the actual handover of possession.

Justice Amit Borkar, presiding over a Commercial Arbitration Petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, observed that the collective will of the General Body in a cooperative structure carries binding force. The Court emphasized that once a society takes a valid decision for redevelopment, individual members, even those who are not signatories to the development agreement, are bound by such decisions.

Court's Rationale on Cooperative Structure and Dissent

The Court noted that a member of a cooperative society accepts the liabilities of the collective structure and cannot insist that only their individual view prevail. In its reasoning, the Court observed: "A cooperative housing society occupies a distinct position in law. It is not merely a building where several persons happen to reside. It is a legal entity recognised by statute... The General Body represents the collective will of the membership. Decisions concerning redevelopment and matters affecting the property of the society are taken through resolutions of the General Body... Once valid decisions are taken by the General Body, those decisions carry binding force unless they are set aside by a competent forum."

While relying on Anita Enterprises v. Belfer Coop. Housing Society Ltd., the Court reiterated that the relationship between a society and its members is governed by the Maharashtra Cooperative Societies Act and the society's bye-laws, where the collective welfare of all members outweighs individual resistance.

Distinction Between Declaration Stage and Possession Stage

The Requirement for Consenting Member Declarations

The Court found that the petitioner developer had already obtained the Minimum Development Potential (MDP) IOD as required under Clause 17.2 of the Development Agreement. Therefore, the obligation for members to submit declarations had matured. The Court stated that allowing a small group to withhold these declarations would freeze the redevelopment process unfairly.

Premature Nature of Eviction Relief

However, the Court declined to grant the relief of physical eviction or the appointment of a Court Receiver at this stage. It noted that according to Clause 17.4 of the agreement, the actual obligation to vacate arises only after obtaining the 'Full IOD' and loading the entire development potential. The Court held that until these contractual contingencies are met, any direction for vacation would be premature.

Directions Issued by the Court

The Court has the following directions:

"(i) The Arbitration Petition is partly allowed.

(ii) Respondent Nos.2 to 11 shall, within a period of four weeks from the date of this order, execute and submit the Consenting Member Declarations in the format prescribed under Annexure D/2 to the Development Agreement dated 31 March 2025 and shall hand over the same to respondent No.1 Society and/or the petitioner.

(iii) Pending constitution of the Arbitral Tribunal and conclusion of arbitral proceedings, respondent Nos.2 to 11 are restrained from creating any third party rights, transferring, alienating, parting with possession, encumbering or otherwise dealing with their respective flats... in any manner whatsoever so as to prejudice the redevelopment contemplated under the Development Agreement dated 31 March 2025.

(iv) Prayer clause (b) seeking directions against respondent Nos.2 to 11 to vacate and hand over possession of their respective flats upon issuance of notice under the Development Agreement is rejected at this stage as being premature.

(v) Prayer clause (c) seeking appointment of a Court Receiver with powers to take physical possession of the flats of respondent Nos.2 to 11 is rejected."

Background:

The dispute arose regarding the redevelopment of Moon Craft Apartments Cooperative Housing Society Limited, a building constructed in 1975. In 2021, the society unanimously resolved to start the redevelopment process. The petitioner, Wadhwa Estates and Developers (India) Private Limited, was appointed as the developer in 2023. A Development Agreement was executed on March 31, 2025, with 22 members signing it. However, Respondent Nos. 2 to 11 (the dissenting members) refused to sign the agreement or submit the 'Consenting Member Declarations' even after the developer obtained the MDP IOD.

The petitioner argued that as per Pranav Constructions Limited vs. Priyadarshini Cooperative Housing Society Limited and Girish Mulchand Mehta & Another vs. Mahesh S. Mehta & Another, the developer can invoke Section 9 against dissenting members. The respondents countered that the petition was premature since the 'Full IOD' had not been obtained and that they were non-signatories to the arbitration agreement. The Court partially agreed with both, ordering the submission of declarations to facilitate the project's progress while protecting the members' right to remain in their homes until the final contractual trigger for eviction is reached.

Case Details:
Case No.: COMM ARBITRATION PETITION (L) NO.13424 OF 2026
Case Title: Wadhwa Estates and Developers (India) Private Limited Vs. Moon Craft Apartments Coop. Housing Society Limited & Ors.
Appearances:
For the Petitioner(s): Mr. Mayur Khandeparkar with Mr. Tushar Guujar and Mr. Deep Madnani i/by SL Partners
For the Respondent(s): Mr. Shanay Shah with Mr. J.R. Vakil i/by J.R. Vakil & Associates for R-1; Mr. Aurelius D’Silva with Ms. Reema Maurya i/by D’Silva & Co. for R-2; Dr. Abhinav Chandrachud with Mr. Altaf Khan, Mr. Akash Mangalgi and Mr. Janay Jain for R-3; Mr. Aniesh Jadhav i/by Mr. Shubham Choudhari for R-4; Mr. Nikhil Adkine with Mr. Avinash Bailmare for R-5; Mr. Amrut Joshi i/by Mr. Nikhil Adkine for R-6 to 11.

Source: 2026 CaseBase(BOM) 238