Bad news for those who block redevelopment in Maharashtra; dissenters to pay for losses incurred

Many redevelopment projects generally get stuck as a handful of members oppose it

Redevelopment of housing societies is set to be a smoother process as the high court, in a landmark judgment, directed that dissenting members of a society have to hand over flats to the developer and be held responsible for recovering the loss incurred due to their opposition. Real estate experts have welcomed the move as many such redevelopment projects are stalled due to this one hurdle.

CA Ramesh Prabhu, founder chairman of Maharashtra Societies Welfare Association, said, "When it comes to redevelopment of cooperative housing societies, many a times a few handful of members try to stop the process either by not giving the consent or by filing frivolous complaints or irrelevant cases. This not only delays the process but also increases the cost of the project as the builder has to continue paying rent to members who vacated flats while the cost of construction also increases."

Around 30 per cent of the registered buildings in the state are over 30 years old

The court order

"In many of such cases the Bombay High Court and Supreme Court passed a number of judgments directing non-consenting members to handover the flat within a certain time, failing which the court receiver is appointed to take the possession with police protection. In the latest Bombay HC judgment dated April 13, 2022 in the Choice Developers v/s Pantnagar Pearl CHS Ltd, Justice G S Kulkarni has not only ordered the dissenting members to handover the flat to the developer but also has held that such members should be made accountable and responsible for recovering the loss," said Prabhu. He added, "The court also held that once a flat owner becomes a member of the society, he shall be bound by the majority members' decision. Based on this, many societies have now decided to pass resolutions that the members who do not abide by the decision of the general body, shall bear the expenses and losses incurred."

Majority rules

Advocate Shreeprasad Parab, expert director, Maharashtra State Co-operative Housing Federation Ltd, said, "There are more than 1,25,000 housing societies registered under the Maharashtra Co-operative Societies Act, 1960 and more than 30 per cent of the buildings are above 30 years old. For redevelopment at least 51 per cent of the members need to provide consent, as mandated under section 79A of the Maharashtra Co-operative Societies Act, 1960. It is the same under Maharashtra Apartment Ownership Act, 1970 as well as Development Control and Promotion Regulation 2034 and Unified Development Control Promotion Regulation 2020." "The HC in its 2022 verdict in the Choice Developers vs. Pantnagar Pearl CHS Ltd and Others stated that it would be appropriate to note the settled position of law that the minority members cannot act against the will of the majority members of the society and obstruct the redevelopment," Parab said.

Others held to ransom

Under a typical redevelopment agreement, all members of the housing society are to get flats in the new building as well as rent for the construction period. "However, some members continue to litigate for years stalling the project and those who vacated their flats are held to ransom because of them. Hence, this move was required to facilitate a smoother redevelopment process," Parab concluded.

Dissenter Speak

(From right) Vinay Rao, Ramendra Mondal and Yugandhara Sangekar

Gagan Vihar Cooperative Housing Society in JB Nagar, Andheri East, is one such building where redevelopment process has not taken off yet. Vinay Rao, Ramendra Mondal and Yugandhara Sangekar are among the few members who have expressed their dissent. Rao told mid-day, "We also feel that redevelopment will be good. However, the society and some residents are insisting on a particular developer who, we have found, has a few police cases filed against him. Our main concern is that his development agreement is very ambiguous such as the rent he is offering for the construction period. He also remained silent about the additional floors. Moreover, the offered corpus of Rs 900 per square feet is far too less, we feel."

51
Percentage of consent needed