Housing society can approach other builder for redevelopment: HC
The HC upheld a single judge's order that prima facie said there was no concluded contract to carry out redevelopment between the society and Kalpataru
Sep 16, 2014
Source : The Times of India
Bombay High Court


MUMBAI: There was no relief from the Bombay high court for Kalpataru Properties in a mega redevelopment project in Kandivli. A division bench of Justice S J Vazifdar and Revati Dhere refused to grant an interim order seeking the appointment of a court receiver and restraining Majhitia Nagar cooperative society from assigning the project to another builder.

The HC upheld a single judge's order that prima facie said there was no concluded contract to carry out redevelopment between the society and Kalpataru.

"If an injunction is granted, almost 300 members will be deprived the benefit of enjoying their property during the pendency of the suit. On the other hand, the (Kalpataru) always has a right to claim damages," the judges said, adding, "Members of the society ought not to be denied the right to better living and better facilities." The court said a resolution passed by the society in 2005 accepting Kalpataru's bid was not enough to say that there was a concluded contract.

"There was, therefore, between the parties only an agreement to enter into an agreement, which is not enforceable in law," the judges said. The HC said the society's undertaking that it would not appoint a new builder would continue to operate till October 15, 2014, to allow the developer to file an appeal.

The society on S V Road had six old buildings with 17 wings and comprised 284 residential flats, 12 shops and a commercial unit. In 2004, following tenders, it accepted a bid to construct four 18-stor- ey towers.

While the flat-owners, shop-owners and bank will be rehoused in an area of around 1.50 lakh sq ft, the developer will be eligible to sell over 1.26 lakh sq ft in the open market. A year later, the society sought to terminate the dealing, which Kalpataru filed a suit against. The developer filed an application seeking an interim order restraining the society from looking for another builder, saying it had a concluded a contract with it.

Kalpataru said there was a contract with the society.

The high court did not agree and said that while there were negotiations and draft agreements exchanged, there was no signed formal agreement.

"The importance of a signed agreement is often greater when many members are involved, all of whom have a stake in the redevelopment of the premises," the court said.

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