HC: Dissenting members can’t act against will of those in majority to obstruct redevelopment

A single-judge bench of Justice Girish S Kulkarni on April 13 passed a judgment in an arbitration plea by Choice Developers against three members of Pantnagar Pearl CHS Ltd., stating that out of 30 members in the society, 26 have vacated but three respondent members, who occupied four units in said building, have not abided by the Development Agreement of March 23, 2021, being executed between the petitioner and the Society.

The court was informed the society, in its  Annual General Body Meeting (AGM) on November 29, 2020, by majority of members passed resolution to appoint the petitioner as developer and the decision was ratified in February 7, 2021 AGM, in presence of  the officers of Maharashtra Housing Area and NOC for redevelopment from  the Deputy Registrar of the Society were obtained and the agreement was executed thereafter.

On July 10, 2021, the developer issued notice to members to vacate the premises within thirty days to enable demolition and construction of new building.

The petitioner, through advocate Rajiv Singh, argued that the three members who did not vacate their premises are obstructing development. It was argued that such an obstruction would also disturb timelines for completion of work and affect the project cost.

Representing two of the three respondent members, advocate Ashok M Saraogi opposed the plea and said that as his clients occupied commercial units, till their issues are resolved, they ought not to be called upon to vacate their units.

After perusing submissions, the bench observed, “The respondents cannot take a position opposing the redevelopment, which is for the beneficial interest of all the members of the Society. They cannot cause suffering to the other members who have already vacated and cannot foist a delay on the petitioner and the Society in commencement of the redevelopment work resulting in the project costs being increased every passing day which would be immensely prejudicial to the petitioner as also the Society.”

Justice Kulkarni held, “They appear to be carrying an approach that as their residential units in the redevelopment are certainly secured, however the situation of the building going for redevelopment can be exploited to coerce the society and the petitioner for something, which prima facie appears to be, is beyond their normal entitlement. Such an approach is deleterious and detrimental to the majority members of the Society…The respondents can have no right to delay, defeat and prejudice the redevelopment by not vacating their respective units. The petitioner has made out a strong prima facie case.”

It also asked the three members not to create third party rights in their premises pending arbitral proceedings and disposed of the plea.

Pending arbitral proceedings, the court directed the three members to vacate their premises and hand them over to the developer within two weeks and said they will also be entitled to benefits granted to other members.