Authority: High Court of Judicature at Bombay, Civil Appellate Jurisdiction

Order Date: 14 October 2026

Case Overview

  • Petitioners: Ramesh K. Devadiga and others (members of Khernagar Nandadeep Cooperative Housing Society Limited – hereafter “the Society”).
  • Respondents: Khernagar Nandadeep Cooperative Housing Society Limited and its Chairman, Secretary and Treasurer.
  • Two writ petitions were filed: WP No. 11719 of 2026 and WP No. 12770 of 2026, both challenging orders of the Co‑operative Appellate Court.
  • Background: The Society, formed by occupants of a building constructed in 1956 at Khernagar, Bandra East, Mumbai, occupies 106.49 sq.m of land (Survey No. 341, CTS No. 602) and has 54 members. The building (ground + 2 floors) was declared dilapidated and a Special General Body Meeting on 25 August 2018 resolved to self‑develop under Regulation 33(5) of the Development Control and Promotion Regulations 2034 (DCPR 2034). M/s Dilip Sanghvi Consultants was appointed as Project Management Consultant. MHADA issued an offer letter on 29 December 2021 approving additional built‑up area.
  • The Society later appointed M/s Vinca Realtors Pvt. Ltd. as Development Manager (DM) and M/s Vinca Realtors Khernagar Pvt. Ltd. as Financer. The DM Agreement was notarised on 8 October 2024; the Finance Agreement was executed on 31 March 2025 and registered on 7 April 2025, both without a General Body resolution.
  • Petitioners alleged: (i) conflict of interest because Mr Nitin Sakalchand Jain (Director of Shree Salasar Investments Pvt. Ltd., parent of Vinca Realtors) is brother of member Ms Shilpa Sakalchand Jain; (ii) tender documents were deficient; (iii) the Society’s self‑development model gave members only 29 % of constructed area while 71 % was allocated to the DM/Financer, effectively a third‑party redevelopment; (iv) the DM and Finance Agreements were void ab initio; (v) lack of compliance with Government guidelines on self‑redevelopment.
  • Petitioners sought a temporary injunction, production of the DM’s three‑year balance sheets, project reports, competitive tender documents, and compliance with government guidelines. The Co‑operative Court (order dated 14 May 2026) rejected both the petition for interim injunction (Exhibit 5) and the Respondents’ application for dismissal under Order VII Rule 11 (Exhibit 13).
  • Appeals: Petitioners filed A.O. No. 41 2026 challenging the rejection of the injunction; Respondents filed A.O. No. 45 2026 challenging the dismissal of the dispute. The Co‑operative Appellate Court dismissed A.O. 41 2026 (order dated 7 August 2026) and allowed A.O. 45 2026 (order dated 4 September 2026), thereby setting aside the Co‑operative Court’s order on the Respondents’ application and confirming the dismissal of the dispute (Dispute CC/II/49/2026).
  • The petitioners appealed both orders through the two writ petitions before this Court.

Legal Reasoning

  • The Court examined the maintainability of a dispute under Section 91 of the Maharashtra Cooperative Societies (MCS) Act, 1960. Two conditions are required: (i) redevelopment must be included as the “business” of the Society by amending its bylaws after the 2019 Amendment; (ii) no right, title or interest must have been created in favour of a third party before filing the dispute.
  • The Society’s bylaws, as admitted, do not contain “redevelopment” as an object; the 2019 amendment only changed the definition of “housing society” but existing bylaws continue to apply unless expressly amended. Hence the first condition is not satisfied.
  • The Development Manager Agreement (8 Oct 2024) and Finance Agreement (31 Mar 2025) created rights in favour of Vinca Realtors Pvt. Ltd. and Vinca Realtors Khernagar Pvt. Ltd. These rights were created before the dispute was filed (13 Feb 2026). Under Section 94(3) of the MCS Act, a party that acquires interest in the Society’s property before the filing cannot be impleaded, and the dispute cannot challenge such agreements in the Co‑operative Court.
  • The Court relied on precedents: Margaret Almeida, Baliram Misal, Parimal H. Solanki, and Anthony Carneiro. These cases establish that (a) the Co‑operative Court may entertain disputes only when redevelopment is expressly a business of the Society and (b) once third‑party rights are created, the dispute must be pursued in a civil suit, not before the Co‑operative Court.
  • The petitioners’ pleadings lacked the mandatory positive averments that (i) the Society’s bylaws have been amended to include redevelopment as a business, and (ii) no third‑party rights have been created. Consequently, the dispute is barred under Order VII Rule 11 of the Code of Civil Procedure.

Final Outcome

  • Both writ petitions (WP 11719/2026 and WP 12770/2026) are dismissed.
  • No order as to costs is made.
  • The petitioners are directed to approach a civil court if they wish to seek an injunction or challenge the Development Manager and Finance Agreements.

Topics: Court Judgment, Cooperative Society Redevelopment, Jurisdiction