Bombay High Court

Minority members cannot obstruct society's redevelopment approved by a majority under a valid development agreement.

Polestar Realtors Private Limited vs Rachana Co Operative Housing Society Limited

Bombay High CourtJUDGMENT: July 17, 20263 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The Petitioner (Owner/Developer) entered into a Development Agreement (DA) dated December 26, 2023, with Respondent No. 1 (Society) for the redevelopment of "Rachana Plots" in Bandra.

Source reference: para 3

The building is old and dilapidated.

Source reference: para 15

Petitioner obtained approvals from the Slum Rehabilitation Authority (SRA) under Regulation 33(11) of the DCPR 2034 and issued notices to vacate.

Source reference: para 3

While 42 out of 63 members consented, Respondent Nos. 2 to 26 refused to vacate, raising various objections: the Managing Committee's term had expired; the scheme was changed from a municipal project to an SRA project; Permanent Alternate Accommodation Agreements (PAAA) were not executed first; and internal shareholding/membership disputes existed.

Source reference: paras 16, 22, 30

The Petitioner approached the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim relief to secure possession for demolition.

Source reference: no citation
02

Issues

1. Whether a minority of dissenting members can obstruct a redevelopment project approved by the majority of the Society.

Source reference: para 34, 39

2. Whether the adoption of an SRA scheme and amalgamation of plots constitutes a breach/material alteration of the DA requiring a fresh resolution.

Source reference: para 44

3. Whether the non-execution of PAAA prior to the vacation notice renders the Section 9 petition premature.

Source reference: para 55

4. Whether the Court should decline relief due to pending disputes before the Co-operative Court or the Deputy Registrar.

Source reference: para 61, 87
03

Law Applied

Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures by the Court.

Source reference: para 1

The principle that the collective will of the majority in a Co-operative Society prevails over the minority in redevelopment matters, as established in Pranav Constructions Limited v. Priyadarshini Cooperative Housing Society Limited.

Source reference: para 36

Internal management disputes under the Maharashtra Co-operative Societies Act, 1960, and challenges to resolutions do not automatically stall redevelopment unless a stay is granted by a competent forum.

Source reference: para 43, 61

Interpretation of "Development Potential" guided by the terms of the DCPR 2034 as integrated into the contract.

Source reference: para 46
04

Reasoning

The Court reasoned that Section 9 jurisdiction is limited to interim protection and cannot adjudicate title or membership disputes, which belong to the Co-operative Court or Registrar.

Source reference: para 35, 36

The DA provided the Developer wide flexibility (Clauses 3.4, 3.5, and 15.9) to utilize "Development Potential," which expressly included amalgamation of plots and adoption of any beneficial Government schemes; thus, the SRA approval was within contractual bounds.

Source reference: para 46-50

Regarding the PAAA, the Court held that while they are necessary to secure member rights, their non-execution does not halt the project if reciprocal cooperation is lacking; instead, execution can be made a condition precedent to vacating.

Source reference: para 56-58

Individual claims to "additional units" or "waitlisted memberships" are independent disputes that do not extinguish upon redevelopment and cannot be used by a few members to hold the majority's interests hostage.

Source reference: para 65-68
05

Holding

The Court partly allowed the petition, holding that the Petitioner established a prima facie case for interim relief.

The Court directed Respondent Nos. 2 to 26 to hand over vacant possession of their flats within four weeks, subject to the Petitioner first executing and registering PAAAs in their favor and paying all accrued transit rent and hardship compensation.

Source reference: para 89(ii)-(iii)

The Court appointed the Court Receiver to take physical possession with police assistance if the respondents fail to comply.

Source reference: para 89(iv)-(vi)

The Court clarified that all findings are prima facie and all independent disputes regarding membership, resolutions, and the Managing Committee are kept open for adjudication by the appropriate forums; Petitioner directed to invoke arbitration within 90 days.

Source reference: para 89(xi)-(xiii)
Bombay High Court

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Polestar Realtors Private LimitedvsRachana Co Operative Housing Society Limited

Bombay High Court · July 17, 2026

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