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Redevelopment Dispute – Termination – New Developer & Injunction

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Judgment 19.8.2025 dated of the Division Bench of the High Court of Bombay in Commercial Appeal No.45 of 2025 of Huges Real Estate Developers LLP  Vs.  Khernagar Adarsh Cooperative Housing Society Limited and others with connected matters.

 Redevelopment – Termination of Agreement & Appointment of new Developer – Temporary Injunction

 On 16.12.2011 the Society and the Plaintiff-Developer executed redevelopment agreement for its building at Khar.  The said agreement was terminated vide letter dated 31.1.2023.  On 17.9.2023, the Society resolved to appoint the defendant no.2 as the new developer.

 The plaintiff – earlier developer filed commercial suit that its development agreement and all offers are valid, binding, prayed for specific performance and that also challenged termination notice dated 31.1.2023.

 However, by the order dated 24.10.2024 the Single Bench rejected the application of the Plaintiff-Developer from restraining the Society from appointing any other developer.  However, the new developer was directed to secure NOC of the plaintiff.

 Timely completion of re-construction assumes importance while considering the issue of grant of temporary injunction to restrain a housing society from proceeding with redevelopment by a new developer.   The Court’s approach ordinarily must be to permit the progress of redevelopment process rather than interdicting the same by temporary injunction. The fundamental principle is that the rights of a developer to earn profits through redevelopment contracts would always remain subservient to the rights of the Society to have its building reconstructed.

 The rights of the earlier developer plaintiff can, however, be secured through other means, if the Society is found to have termined the agreement in an illegal manner, the Court can put the ociety to terms before allowing the redevelopment process to progress through another developer.

 

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