The Bombay high court has once again ruled that members of a co-operative housing society who are in minority cannot obstruct a redevelopment project and must abide by the majority decision of the society, unless they show that here is some prejudice caused to them or a fraud has been committed.

The decision came in a judgement pronounced on Friday by Justice S J Kathawala while giving thumbs up to a petition filed by the Godi Kamgar CHS (Madhuvan) in Andheri (W) and Bharat Infrastructure and Engineering Ltd, a developer challenging a March 2008 order passed by the Maharashtra co- operative appellate court.

The HC ruling, the detailed copy of which will be available later, also made it clear with a direction to the society that it must allot flats to about 20- odd minority members out of the 172 members across seven buildings in the society which were constructed in 1965. The allotment has to be made with a week as the new 18-storey tower has already been constructed. If they refuse to vacate their old premises then the co-operative society is empowered to take possession of flats, if necessary with police help.

The judgement on the issue, whether minority members in a co-operative society can obstruct redevelopment project or not, is significant because it essentially comes on a petition filed by the co-operative society which had taken the proper route of going to a co-operative court first. The developer, who was also a petitioner before the HC but not before the co-operative court, said that he has already spent over Rs. 20 crore in the reconstruction that began with a bhoomipujan in 2004, but the main plea was that the “majority decision of the society by 153 members must hold good” over the disputing minority.

Online GST Certification Course by TaxGuru & MSME- Click here to Join

The society through its lawyer Mukesh Vashi also pointed before the HC that the new building was already granted an OC in 2007. The redevelopment project was knocked about in various courts. The minority members had moved the city civil court earlier for an injunction to stop the development work but were not granted any relief and they also failed to get any reprieve in the cooperative courts.

Later the co-operative court ordered the society to hold a meeting and allot flats to all. The 20-odd members opposed and the appellate court set aside the cooperative court’s order, which came to be challenged before the HC. Advocate P Bharucha for the minority members argued that a recent HC judgement allowed minority members to obstruct the work, besides the redevelopment was in violation of building plans and was replete with illegalities committed by the society while deciding on the redevelopment.

Vashi said a majority decision is binding on the dissenting members unless there was some fraud. Besides, he said the society has a right to evict the minority dissenters. In the new building, 64 out of the 87 flats are already occupied by the old members.

THE COURT RULES

2007: In the Sahara Co-op Hsg Society (Khar) case Justice A M Khanwilkar of the Bombay HC had paved the way for easy redevelopment by ruling that dissenting minority members could be evicted forcibly

Dec 9, 2009: Justice S C Dharmadhikari (HC) separately held that even a single dissenting member of a co-op housing society cannot be thrown out by a builder based on a mere development agreement with the society and a majority of its flat owners for redevelopment of the building

Dec 11: A division bench of the Bombay HC overturned the single judge verdict and then Chief Justice Swatanter Kumar and Justice Ajay Khanwilkar held that “merely because some members in minority disapprove of the decision, it cannot be the basis to negate the resolution of the general body”

More Under Corporate Law

Posted Under

Category : Corporate Law (3437)
Type : Judiciary (9971)

0 responses to “Minority members of co-operative housing society cannot obstruct a redevelopment project”

  1. R.J.Pereira says:

    The Secretary of the society is not a member(his wife is a member).
    So also members attending general body meeting are only representatives of members.
    If redevelopment is agreed in such meeting, can it not be challenged by minority members?

Leave a Reply

Your email address will not be published. Required fields are marked *