Bombay High CourtArbitration and MediationProperty and Real Estate Law

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

Polestar Realtors Private Limitedv.Rachana Co Operative Housing Society Limited

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 Court. LawLens
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In brief

The question

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

The court held

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

It also directed

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.

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

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.

01Facts

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.

¶ 3

The building is old and dilapidated.

¶ 15

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

¶ 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.

¶ 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.

02Issues

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

¶ 34, 39

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

¶ 44

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

¶ 55

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

¶ 61, 87

03Law Applied

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

¶ 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.

¶ 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.

¶ 43, 61

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

¶ 46

Provisions in the judgment · 1 · Linked ones open on LawLens

Negotiable Instruments Act, 1881 Section 138

04Reasoning

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.

¶ 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.

¶ 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.

¶ 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.

¶ 65-68

05Holding

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.

¶ 89(ii)-(iii)

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

¶ 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.

¶ 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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