The Bombay High Court has clarified that a single dissenting member of a cooperative housing society cannot indefinitely obstruct the redevelopment of an entire building, even where proprietary claims over common areas like terraces remain unresolved. The judgment reinforces the primacy of collective decision-making under cooperative law and affirms the court’s power to grant interim relief under Section 9 of the Arbitration and Conciliation Act to facilitate project continuity.
Background & Facts
The Dispute
The petitioner, Dev Pooja Builders Private Limited, is the developer engaged by the Shreeram Prasad Cooperative Housing Society to redevelop its aging building. The Society, comprising 20 members, has secured the consent of 19 members for redevelopment. Only Respondent No.1, the owner of Flat No.20, refuses to vacate, claiming exclusive ownership of the terrace above the building. The Society and the developer dispute this claim, arguing the terrace is a common amenity. Respondent No.1 relies on prior Co-operative Court orders suggesting entitlement, but those orders were not final adjudications on title.
Procedural History
- The petitioner filed this petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim relief to vacate Flat No.20 before arbitral proceedings commence.
- Respondent No.1 opposed the petition, asserting that redevelopment cannot proceed without resolution of its terrace rights.
- The court conducted a limited inquiry under Section 9, confined to whether interim measures were warranted to prevent irreparable delay to the redevelopment project.
Relief Sought
The petitioner sought an order directing Respondent No.1 to vacate Flat No.20, enabling demolition and redevelopment. The petitioner also sought to preserve financial benefits accruing from the redevelopment for eventual disbursement to Respondent No.1 upon resolution of its claims.
The Legal Issue
The central question was whether Section 9 of the Arbitration and Conciliation Act, 1996 permits a court to grant interim relief ordering a dissenting cooperative member to vacate premises, despite pending disputes over proprietary rights to common areas, where the majority of members have consented to redevelopment.
Arguments Presented
For the Petitioner
The petitioner relied on the settled principle that cooperative societies function on collective decision-making, and individual members are bound by resolutions passed under the Maharashtra Cooperative Societies Act. It cited Pranav Constructions Limited v. Priyadarshini Co-operative Housing Society Limited to argue that the rights of individual members are subservient to the Society’s obligations under the Development Agreement. It further contended that Section 9 is designed precisely to prevent obstruction of projects pending arbitration, and that delay caused by one member defeats the public interest in urban renewal.
For the Respondent
Respondent No.1 argued that its claim to the terrace is a substantive proprietary right that cannot be overridden by majority vote. It contended that granting interim relief without adjudicating title would violate its fundamental right to property under Article 300A and that the court should not interfere in pending disputes already before the Co-operative Court. It also asserted that the Development Agreement did not extinguish its exclusive rights.
The Court's Analysis
The Court emphasized that Section 9 is an extraordinary remedy meant to preserve the subject matter of the dispute pending arbitration. It held that the court’s role under Section 9 is not to adjudicate title or ownership, but to assess whether interim measures are necessary to prevent irreparable harm to the project’s viability.
"An individual member cannot hold the entire redevelopment process hostage to a dispute that is not yet finally adjudicated, especially when 19 out of 20 members have consented and the building is in a dilapidated condition."
The Court distinguished between substantive rights and procedural rights. While Respondent No.1 retains the right to litigate its terrace claim in a separate proceeding, it cannot use that pending claim to block the collective will of the Society. The Court noted that the Society’s redevelopment plan had been approved under statutory frameworks, and the developer had already invested substantial resources based on majority consent.
The Court further held that the remedy available to Respondent No.1 is not to obstruct, but to seek appropriate interim and final relief in an independent civil suit or arbitration. The court’s directions ensured that financial benefits and alternate accommodation options remained open, preserving Respondent No.1’s substantive rights while enabling the project to proceed.
The Verdict
The petitioner succeeded. The Court held that Section 9 of the Arbitration and Conciliation Act authorizes interim relief to vacate premises of a dissenting member when redevelopment is supported by the majority of a cooperative society, and the dispute over proprietary rights remains unadjudicated. The Court directed Respondent No.1 to vacate Flat No.20 by 28 February 2026, while preserving all its rights to pursue independent legal remedies.
What This Means For Similar Cases
Collective Consent Overrides Individual Objections
- Practitioners must now argue that majority consent in cooperative societies binds dissenting members in redevelopment matters, even where proprietary claims exist.
- Section 9 petitions are viable tools to seek immediate possession when redevelopment is stalled by one or two members.
- Courts will not entertain arguments that delay the project unless the claim is already adjudicated or supported by a final order.
Interim Relief Preserves Substantive Rights
- Courts will not extinguish individual rights; they merely defer adjudication.
- Developers must structure relief to include: (a) preservation of financial benefits, (b) offer of alternate accommodation, and (c) express preservation of litigation rights.
- Failure to offer such safeguards may render interim orders vulnerable to challenge.
Procedural Compliance Is Non-Negotiable
- All redevelopment must comply with the Maharashtra Cooperative Societies Act and relevant municipal bylaws.
- Courts will not grant relief if the Society’s resolution is procedurally defective or lacks quorum.
- Documentation of member consent, development agreements, and building condition reports are critical to establish urgency under Section 9.
