Redevelopment – Garage tenants in Housing Society

Poddar Apartment was purchased by the respondent no.1 Society.  However, the vendor had retained the ground floor of 44 shops, basement and 5 enclosed garages as absolute owner and was admitted as member of the society.

On the death of vendor, respondent nos.2 to 4 claim ownership for the ground floor.  

Respondent nos.5 to 8 are inducted as tenants for 5 enclosed garages.

On 21.5.2024, the Development Agreement was executed between the Developer – Ambit Urbanspace, the Society and respondent nos.2 to 4 as confirming parties.

On 9.10.2024, the LoI was issued and IoA was issued on 15.10.2024.

On 10.10.2024, the BMC issued section 354 notice for demolition of the building.

On 16.11.2024, the society informed the Developer that out of total 81 members / tenants, 29 members and 24 tenants have vacated their premises.

Respondent Nos. 5 to 8 tenants of garages and respondent no.9 inducted illegally by respondent no.6 for garage no.2 have refused to vacate the premises.

The Developer file section 9 petition for interim measures to direct respondent nos. 5 to 9 to vacate the garages and execute the agreement.  The Developer also sought direction for Rs.10,000/- per month as pre-estimated liquidated damages / penalty.  The learned Single Judge did not grant any relief and disposed of the petition vide Judgment dated 1.4.2025.

The Development Agreement would bind even non-cooperative members, who are not signatories thereof and the Court can exercise power under Section 9 of the Act to direct handing over of possession to the developer.

Garage in a building is usually used for parking facility to the owner of the flat / shop in the building.   It cannot be independently sold to a person not occupying any flat / shop in that building. The existence of five garages are essentially interlinked with the flat / shop ownership of respondent nos.2 to 4 in the building.  The Respondent nos.2 to 4 as members of the society are bound by the Development Agreement and they are bound to hand possession of their garages.

The privity of contract between Respondent Nos.2 to 4 with Respondent Nos.5 to 8 are their private arrangement which has no impact on the development agreement between Respondent Nos. 2 to 4, Society and the Developer.  The rights of garage tenants would always remain subservient to the developer’s right under the Development Agreement and contractual obligations of the Society.

An occupier inducted by a member of a cooperative housing society cannot claim independent right against a developer.  Otherwise, it would cause violence to the ratio of the judgment of Division Bench in Girish Mulchand Mehta case.  Their rights can be adjudicated independently.  What is sought to be done by the occupiers of garages is continue to hold redevelopment the Society’s building to ransom.  The Court under Section 9 in such cases is justified in securing possession to the developer without waiting resolution of dispute between the occupier, member of a society, the developer and the society.

In para 42 of the judgment, the Division Bench has aptly given the illustration of dispute between senior citizens and children or husband and wife under the Senior Citizens Act 2007 and the DV Act 2005 and injunctive relief inter se between the parties would not obstruct the redevelopment process while their rights can be rightly adjudicated.

Mere threat or possibility of loosing tenancy rights in the garages on allotment of surface car parking spaces in new building need not detain the redevelopment of building.   If a person who has purchased a garage can be  directed to vacate the same under section 9 of the Act, there is no reason why the respondent nos.5 to 8, whose tenancy rights of garages is questionable and yet to establish the same can obstruct the redevelopment.

Eighty members and tenants of the dilapidated building would suffer if the interests of tenants in four garages, who are yet to establish their rights and whose commercial use is questionable, are to be protected.   Therefore, interim measures in the present case are warranted.

 

Judgment dated 1.7.2025 of the Division Bench of the High Court of Bombay in Commercial Arbitration Appeal (L) No.12585 of 2025 in Commercial Arbitration Petition (L) No.38696 of 2024 of Ambit Urbanspace   Vs.  Poddar Apartment Cooperative Housing Society and others with connected matters