Strategic Clauses to Empower Developer to Overcome Dissenting Members of Society

Judgment dated 18.6.2026 of the High Court of Bombay in Commercial Arbitration Petition (L) No.13424 of 2026 of Wadhwa Estates and Developers (India) Private Limited   Vs.   Moon Craft Apartments Coop. Housing Society Limited and others.

The petitioner was appointed as Developer of the housing society.  Majority of the members approved the final draft of the development agreement and twenty two members executed the said agreement.

Clause 17.2 of the Agreement provided that in the event some of the members of the society fail to give consent declaration, then the Developer with the society shall take legal steps against the dissenting members to vacate their flats for redevelopment.

To the same effect is clause 17.9.

Clause 17.7 further provided that the litigation expenses against dissenting members shall be initially borne by the Developer and to recover or adjust against any sums payable to the dissenting members.

Respondent nos.2 to 11 did not give their consent declarations.

The petitioner – developer filed arbitration petition directing the respondent nos.2 to 11 to vacate their flats pending constitution of the arbitral proceedings.

In redevelopment matters this principle assumes importance. Redevelopment is not an activity affecting one flat or one member. It concerns the entire building. It concerns the land on which the building stands. It concerns the collective welfare of all members. Therefore, redevelopment cannot proceed on the basis of consent of every individual member in every case. The law recognises the reality that collective decisions must govern such matters. Otherwise, even a single member may prevent implementation of a project desired by the overwhelming majority. Therefore, unlike owners of separate properties who may deal with their properties in any manner they choose, a member of a cooperative housing society is required to function in accordance with the provisions Act. Once valid decisions are taken by the General Body, those decisions carry binding force unless they are set aside by a competent forum.

Thus, society functions as an independent legal entity. This aspect assumes importance in redevelopment matters because when a society executes a Development Agreement through authorised office bearers after resolutions are passed by the General Body, the agreement cannot be treated as only a collection of promises given by members. The agreement is entered by the society. Rights and obligations flowing from such agreement belong to the society. Therefore, while examining redevelopment disputes, it may not be correct to proceed as if the Development Agreement is nothing more than personal arrangements with individual members.

Redevelopment projects involve many members having different views. Some may support redevelopment. Others may oppose it. Yet once the proposal is approved through requisite majority, the project cannot be rendered incapable of implementation merely because a small group disagree.