HC backs hsg soc, allows new builder after 13-year delay

MUMBAI: The Bombay High Court on Friday declined a builder's plea to restrain a Wadala society from replacing him to redevelop 46 buildings with 900 tenants. Justice Sandeep Marne, dismissing the challenge by Pioneer Constructions against Sahakar Nagar CHS, observed that he was appointed in 2013 to carry out the redevelopment and the tenants can't wait indefinitely.The stakes of the housing members "are way higher" than those of the developer, the HC observed, dismissing a petition filed by the builder under an apprehension that the society would execute an agreement with a new developer, citing project delays.Pioneer filed a commercial arbitration petition after the society held a general body meeting on Jan 10, passing a resolution to appoint Sugee Avenue Pvt Ltd. The society had also scheduled another SGM on April 23 to finalise a draft of the development agreement to be executed with the new developer. The builder sought a stay on the resolution as interim relief. The society had obtained no-objection from authorities and SGBM approval before executing another development agreement with Pioneer on June 22, 2015.The HC granted no interim relief but appointed a sole arbitrator in the disputes arising out of the development agreement dated June 22, 2015, as amended vide fresh development agreement dated April 22, 2016. The builder's senior counsel, Dinyar Madon, argued that the 2016 resolution tasked the society with ensuring 70% individual consent before the builder could go for civic permissions. Madon also pointed to the lack of a termination clause in the development deals. He also cited other reasons for delay, including DCR changes, members' litigation and the Covid-19 pandemic. The society's counsel, Chaitanya Chavan, said the delay cannot be countenanced and the society was right in proceeding with a new builder, as petitioner did "absolutely nothing" for 13 years beyond spending Rs 1 crore towards EMD, leaving tenants in despair.Justice Marne said if interim relief is granted to the petitioner's favour, it would lead to the project being "delayed indefinitely". "This would endanger the lives of the 826 members, who are residing in the buildings constructed in the year 1957. The members are waiting for safer, bigger and better homes for the last 13 years and their wait cannot continue indefinitely." On the other hand, if interim measures are refused, the petitioner may only lose opportunity of earning profits,” the HC held, saying if builder succeeds in arbitration, he can get compensated.