Bandra Society Redevelopment: Bombay HC Says No Final Contract Signed With Developer
Mumbai: In a major win for Kher Nagar Sai Prasad Co-operative Housing Society in Bandra East, the Bombay High Court has ruled that no binding redevelopment agreement existed with developer Pittie Antariksh GRL Pvt Ltd.
The court set aside an earlier order that had restrained the society from appointing another developer, holding that negotiations between the two sides were still ongoing and no formal development agreement had been executed.
Favoring the society, the bench said without a formal development agreement, the redevelopment process cannot be left in the hands of the developer as this would virtually leave the members “at the mercy of the developer”.
A division bench of Chief Justice Alok Aradhe and Justice MS Karnik, on April 25, allowed the society’s appeal challenging a February 1, 2024, order passed by a single judge of the HC which had granted interim relief to the developer.
The developer had sought an interim injunction against the society to prevent it from terminating their appointment or engaging a new developer during the pendency of its suit against the society. The developer contended that its final agreement was reflected in letters dated August 30, 2021, and October 23, 2021.
However, Senior Advocate Zal Andhyarujina, representing the society, argued that no final agreement had been reached. “This is not a case of a concluded contract,” he said, pointing out that key aspects like flat areas, timelines, and termination clauses were still under negotiation.
Senior Advocate Sharan Jagtiani, appearing for the developer, maintained that the essential terms had already been agreed and that the Single Judge’s injunction was justified.
The HC disagreed, observing, “It is pertinent to note that the negotiations between the parties were still ongoing. The final development agreement was yet to be signed by the parties.”
The judges agreed with society that the developer merely stood as the successful tenderer which was the conclusion of the tender process and nothing more. “The next stage of the contractual process necessarily involved a development agreement between the society and the developer which admittedly never fructified and was in the process of negotiation,” the bench underscored.
The court emphasised that mere appointment of the developer through a general body meeting could not substitute for a formal, executed contract. “The redevelopment process cannot be left in the hands of the developer without a formal agreement, which would virtually leave the members at the mercy of the developer,” it said.
The judges also noted that the society would suffer greater hardship if forced to proceed without a signed agreement, whereas the developer could seek damages if necessary. “The essential requirement for a concluded contract is the execution of a formal development agreement,” the bench observed.
The court rejected the developer’s request for a four-week stay and allowed the society’s appeal, quashing the interim protection.
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