Minority Members obstructing Redevelopment, read this says Adv. R. P. Rathod.
Here I have published four judgments passed by High Court of Mumbai in the matter of Minority v/s majority of members agreeing to the proposal of Redevelopment which are contradictory to each other.
However, the High Court Judgments dated 11/12/2009 and 28/06/2010 over rule all the earlier Judgments the High Court has given in September, 2007 and on dated 09/12/2009. All the four cases are summarized here under:
1. HC JUDGMENT DATED 31ST AUGUST 07: RULED THAT DISSENTING MINORITY MEMBERS COULD BE EVICTED FORCIBLY: In the case of Sahara Co-op Hsg Society (Khar), Justice A M Khanwilkar of the Bombay High Court paved the way for easy redevelopment by ruling that 2 members who had not given their consent to the builder, could be evicted forcibly. He ruled that a dissenting minority of flat owners cannot stall redevelopment plans of their building and could be forcibly evicted from their homes with the help of the police if necessary. The Judgment was passed in the favor of the Raja builders on 31st August 07, Mumbai, leaving the flat owners with no option but to give their flats to the builder.
2. HC JUDGMENT DATED: 09/12/2009: EVEN ONE OBJECTOR CAN’T BE IGNORED DESPITE MAJORITY NOD: Justice S C Dharmadhikari of the Bombay High Court 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. The Court clearly indicated that a Development Agreement entered into by the Housing Society with a builder, despite having the consent of a majority of members, cannot bind the minority if the reconstruction is not in the interest of "ALL" members of the Society.
3. HC JUDGMENT DATED: 11/12/2009: MINORITY CAN’T OBSTRUCT A REDEVELOPMENT PROJECT: In the case of Godi Kamgar CHS (Madhuvan) in Andheri (West), a Division Bench of the Bombay HC overturned the single judge verdict dated 09/12/2009 and the 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 unless they show that there is some prejudice caused to them or a fraud has been committed”.
4. HC JUDGMENT DATED: 28/06/2010: ORDER AGAINST APPEAL PASSED THAT THE “OBSTRUCTING MINORITY’’ TO VACATE THEIR FLATS WITHIN TWO WEEKS: On June 28, 2010 in the case of Godi Kamgar CHS (Madhuvan) in Andheri (West), 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.
The Bombay high court dismissed an appeal filed by the members who were in minority to challenge an earlier order Dated 11/12/2010 of the court which too had gone against them. A bench of Chief Justice Mohit Shah and Justice S C Dharmadhikari ordered the members to vacate their flats within two weeks.
If the minority dissenting members do not have points on merits and if the Society has gone by the law, the minority may ultimately lose before the law. What is important is the merit in the objections. Per se, rule of majority is not the solution, whether it is redevelopment or any other matter in a Co-operative Society.
In case of tenanted Societies also, in a recent ruling, the Bombay High Court has stated that the issue of minority of tenants cannot be an obstacle for redeveloping a property if minimum 70% of the tenants are ready for the same.
The judgment came against a matter of a redevelopment in Dadar where 17 members were opposing the redevelopment of an old Parsi chawl. Based on the writ petition filed by the group of dissenting members, Justice D. B. Bhosale granted the permission to BMC to forcibly evict the families with the police help in case of any opposition from the others against the redevelopment.
It is important to note that as per the section 103B of Maharashtra Housing and Area Development Act, 1976, with the guidelines for redevelopment of old Municipal Properties by the Municipal Tenants Co-Operative Housing Societies on the land owned by the Corporation under regulation 33(7) of the Development Control Regulations for Greater Bombay, 1991, it is necessary that more than 70% of the eligible existing Municipal tenants should give written consent to redevelop the property under the scheme with a formation of a Co- Operative Society/ Association and an initiative proposal for the redevelopment.
The court has held that once 70% or more occupants /tenants give their consent for redevelopment by forming a co-operative body and if the scheme is approved by the Corporation, it is binding to all other occupants. As per the guidelines, the tenants/ occupants with separate stand, have no choice but to follow the norms. Being in minority (about 30% or less than that) the only choice for them remains is, to give up their tenancy rights and quit from the scheme.
It is an established position of law that a Development Agreement by itself does not create rights in a property in a developer’s favour. The developer, thus, has no locus standi and cannot be entertained for eviction of such dissenting members of the Society. But the society can approach the co-operative court to enforce its resolution.
In a society, decisions are not necessarily taken by the application of mind by all. More often than not, some individuals influence the majority. That is because normally, only a handful are able to evaluate right and wrong and distinguish between what is talked about and what is actually being done.
If the minority dissenting members do not have points on merits and the society has gone by the law, the minority may ultimately lose before the law. What is important is the merit in the objections raised by such minority dissenting members. Per se, rule of majority is not the solution, whether it is redevelopment or any other matter in a co-operative society.
A well drafted consent of at least ¾ of the Society members must be obtained in writing during the Society meetings when the subject of redevelopment is discussed. The consent has to be tendered by the members in favor of Redevelopment has to be given once only. However, the minority members of co-operative housing society cannot obstruct a redevelopment project unless they show that there is some prejudice caused to them or a fraud has been committed concludes Adv. R. P. Rathod.