Dissenting Society Members Cannot Stall Redevelopment, But Developer Cannot Seek Eviction Before Full IOD: Bombay High Court
Court Directs Members to Submit Redevelopment Declarations but Refuses Anticipatory Eviction and Appointment of Court Receiver Before Contractual Conditions Are Fulfilled
The Bombay High Court has held that dissenting members of a cooperative housing society cannot obstruct a redevelopment project validly approved by the society merely because they did not sign the development agreement or personally consent to the proposal.
Justice Amit Borkar, however, clarified that a developer must strictly follow the sequence of obligations prescribed in the redevelopment agreement. While the dissenting members could be directed to submit the required declarations at the stage already reached by the project, they could not be ordered to vacate their flats before the developer obtained the Full Intimation of Disapproval, loaded the entire development potential and issued the contractually required notice to vacate.
The Court therefore partly allowed a Section 9 petition filed by Wadhwa Estates and Developers (India) Private Limited. It directed the dissenting members to submit their Consenting Member Declarations within four weeks and restrained them from creating third-party rights in their flats. The prayers for possession and appointment of a Court Receiver were rejected as premature.
Background
The dispute concerned the redevelopment of Moon Craft Apartments Cooperative Housing Society Limited at Bandra West, Mumbai.
The building, constructed in 1975, comprised 38 residential flats and seven garages. In December 2021, the society commenced the redevelopment process. A Project Management Consultant was appointed in September 2022, and Wadhwa Estates was selected as the developer in May 2023.
The Deputy Registrar of Cooperative Societies subsequently confirmed that the developer had been appointed in accordance with the prescribed procedure.
After further approvals by the General Body, a registered Development Agreement was executed on 31 March 2025 between the developer, the society and 22 members.
Development Agreement Created a Stage-Wise Process
Clause 17 of the Development Agreement divided the redevelopment process into separate contractual stages.
At the first material stage, the developer was required to obtain the Minimum Development Potential Intimation of Disapproval, referred to as the MDP IOD.
After obtaining the MDP IOD, the developer could call upon the members to submit Consenting Member Declarations in the prescribed format.
The next stage required the developer to procure and load the transferable development rights, obtain the necessary civil aviation permission and secure the Full IOD with the complete development potential.
Only after obtaining the Full IOD and loading the full development potential could the developer issue a 45-day notice calling upon the society and its members to vacate the building.
The agreement therefore treated the obligation to submit a declaration and the obligation to surrender possession as two distinct events arising at different stages.
Majority Members Submitted Declarations
The developer obtained the MDP IOD from the Brihanmumbai Municipal Corporation on 5 March 2026 and communicated it to the society.
The society then called upon its members to submit the declarations contemplated under the Development Agreement.
According to the developer, 32 out of 38 members submitted their declarations by 24 March 2026. Respondent Nos. 2 to 11, who occupied seven flats, did not do so.
The developer approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking directions requiring the dissenting members to:
- execute the Consenting Member Declarations;
- vacate their flats within 45 days after the future notice to vacate;
- alternatively, submit to a Court Receiver taking physical possession; and
- refrain from transferring or creating third-party rights in their flats.
Dissenting Members Questioned Maintainability
The dissenting members argued that they had neither signed the Development Agreement nor participated in the redevelopment process and could not therefore be treated as parties to its arbitration clause.
They further contended that the developer had not yet obtained the Full IOD or issued the contractual notice to vacate. Any direction concerning possession would consequently be founded on uncertain future events.
Questions were also raised regarding the extent of permissible development potential and the proposed utilisation of Floor Space Index under Regulations 33(7)(B) and 33(20)(B) of the Development Control and Promotion Regulations, 2034.
According to the dissenting members, the redevelopment proposal could not be altered or expanded without fresh approval from the society’s General Body.
Cooperative Society Is More Than a Collection of Flat Owners
The High Court explained that a cooperative housing society cannot be viewed merely as a building occupied by several unrelated flat owners.
A registered cooperative society is a statutory legal entity functioning under the Maharashtra Cooperative Societies Act, the applicable rules and its bye-laws. Membership confers valuable rights but also carries obligations arising from the cooperative structure.
The General Body represents the collective will of the members and is the supreme authority concerning the society’s affairs.
Redevelopment affects the entire building, the underlying land, common areas and the collective welfare of all members. Such a project cannot ordinarily be made dependent upon the individual consent of every member.
Once a redevelopment decision is validly approved by the required majority, it remains binding unless set aside by a competent forum.
A dissenting member may challenge the resolutions through legally available proceedings, but cannot simply disregard them or treat himself as wholly independent of the society.
Non-Signatory Status Does Not Automatically Defeat Section 9 Relief
The Court held that the enquiry under Section 9 does not conclude merely because an individual member did not sign the Development Agreement.
A member’s occupation rights, entitlement to permanent alternate accommodation, corpus, transit rent and other redevelopment benefits arise through the society and the collective redevelopment arrangement.
A member cannot claim the benefits flowing from the redevelopment scheme while simultaneously asserting that he stands entirely outside the arrangement.
The Court distinguished proceedings under Section 11 of the Arbitration Act from those under Section 9.
In Section 11 proceedings, the Court is principally concerned with whether a person can be referred to arbitration as a party to the arbitration agreement. Section 9, however, concerns interim protection intended to preserve contractual rights and prevent obstruction of an arbitral process.
Therefore, in appropriate circumstances, interim measures under Section 9 may extend to dissenting non-signatory members whose conduct obstructs a redevelopment project validly approved by the society.
The Court nevertheless cautioned that society membership alone does not automatically justify every relief sought against a dissenting member. The Court must examine the member’s relationship with the society, the redevelopment arrangement and the precise contractual stage reached by the project.
Contractual Sequence Cannot Be Bypassed
The Court emphasised that neither a party nor the Court can isolate one contractual clause and disregard the sequence created by the agreement.
Redevelopment agreements ordinarily prescribe successive stages because each obligation depends upon the completion of the previous one.
Courts must enforce the contract in the form agreed by the parties and cannot accelerate a future obligation merely because that course may be more convenient for the developer.
In the present case, the obligation to submit the declarations arose after the MDP IOD was obtained. The developer had completed that requirement, informed the society and called upon the members to comply.
The declaration stage had therefore already matured.
By contrast, the obligation to vacate would arise only after obtaining the Full IOD with the entire development potential loaded and issuing the stipulated 45-day notice.
Those requirements had not yet been completed.
Dissenting Members Directed to Submit Declarations
The Court found that withholding the declarations after the MDP IOD had been obtained could prevent the project from progressing to the next stage.
Clause 17.2 itself contemplated legal proceedings where members failed to submit their declarations. The presence of this clause demonstrated that the parties had envisaged judicial intervention even before the stage of physical vacation.
The dissenting members were accordingly directed to execute and submit the declarations in the format prescribed under Annexure D/2 of the Development Agreement within four weeks.
The Court clarified that signing the declarations did not amount to an immediate direction to vacate. It represented compliance with the obligation arising at the existing stage of redevelopment.
Anticipatory Eviction Refused
The Court rejected the developer’s request for an advance order requiring the members to vacate once the developer obtained the Full IOD and issued a future notice.
Although the proposed direction was conditional, it still sought judicial recognition and enforcement of an obligation that had not yet matured.
The Full IOD had not been obtained, the full development potential had not been loaded and the 45-day notice had not been issued.
The contractual safeguards appeared to have been included to ensure that members were not required to surrender possession before the redevelopment project had reached a sufficient level of statutory and financial preparedness.
Granting an anticipatory eviction order would blur the distinction between the declaration stage and the possession stage and would effectively alter the agreed contractual sequence.
The prayer for appointment of the Court Receiver with authority to take physical possession, break open locks and hand over the flats to the developer was consequently also rejected.
Injunction Against Third-Party Rights
Pending constitution of the Arbitral Tribunal and completion of the arbitral proceedings, the Court restrained the dissenting members from:
- transferring or alienating their flats;
- parting with possession;
- creating third-party rights;
- encumbering the premises; or
- otherwise dealing with the flats in a manner prejudicial to the redevelopment.
This protection was granted to prevent the existing dispute from becoming more complicated and to preserve the redevelopment property while the parties pursued arbitration.
FSI and Revised Redevelopment Issues Left Open
The Court did not decide the disputes concerning:
- the exact development potential available to the project;
- utilisation of FSI under Regulations 33(7)(B) and 33(20)(B);
- the proposed supplementary redevelopment arrangement;
- validity of future statutory permissions; or
- individual claims and objections raised by the dissenting members.
These questions were expressly left open for determination before the appropriate forum if and when they matured into an actual dispute.
Decision
The Bombay High Court partly allowed the petition and ordered the dissenting members to submit their Consenting Member Declarations within four weeks.
It also restrained them from creating third-party rights in their flats during the arbitral process.
However, the Court refused to order their eviction or appoint a Court Receiver at the present stage. The developer may seek possession-related relief before the appropriate forum after satisfying the contractual requirements for obtaining the Full IOD and issuing the notice to vacate.
No order as to costs was passed.
Key Legal Principle
A dissenting member of a cooperative housing society cannot avoid a redevelopment decision validly taken by the General Body merely by refusing to sign the Development Agreement.
Section 9 interim measures may, in appropriate cases, extend to such non-signatory members where their conduct obstructs implementation of the society’s collective decision.
However, the developer must strictly comply with the stage-wise conditions prescribed in the Development Agreement. Cooperation may be compelled when the relevant obligation has matured, but eviction cannot be ordered before the contractual conditions governing possession are fulfilled.
Case: Wadhwa Estates and Developers (India) Private Limited v. Moon Craft Apartments Cooperative Housing Society Limited & Others
Court: Bombay High Court
Case Number: Commercial Arbitration Petition (L) No. 13424 of 2026
Judge: Justice Amit Borkar
Date: 18 June 2026
Result: Petition partly allowed; declarations and protective injunction granted, eviction and Court Receiver refused as premature
