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 (the Society).
  • Respondents: Khernagar Nandadeep Cooperative Housing Society Limited and its office‑bearers (Chairman, Secretary, Treasurer).
  • Two writ petitions were filed: WP No. 11719/2026 and WP No. 12770/2026, both challenging orders of the Co‑operative Appellate Court.
  • The underlying dispute (Dispute CC/II/49/2026) sought a temporary injunction, production of documents, and compliance with government self‑redevelopment guidelines.
  • The Society’s building (constructed 1956, 106.49 sq m land, 54 members, 3‑storey) was slated for self‑redevelopment under Regulation 33(5) of the Development Control and Promotion Regulations 2034 (DCPR 2034).
  • The Society appointed M/s. Dilip Sanghvi Consultants as Project Management Consultant and later, after a series of rejected RFPs, appointed M/s. Vinca Realtors Pvt. Ltd. (Development Manager) and M/s. Vinca Realtors Khernagar Pvt. Ltd. (Financer).
  • Petitioners alleged conflict of interest (Mr Nitin Sakalchand Jain, director of Shree Salasar Investments, is brother of member Ms Shilpa Sakalchand Jain), irregular tendering, and that the self‑development model gave members only 29 % of constructed area while 71 % was taken by the Development Manager/Financer.
  • They claimed the Development Manager Agreement dated 8 Oct 2024 and Finance Agreement dated 31 Mar 2025 were void ab initio and that the project was in fact a third‑party redevelopment.

Lower Court Proceedings

  • The Co‑operative Court (order dated 14 May 2026) rejected both the petitioners’ application for temporary injunction (Exhibit 5) and the respondents’ application for dismissal under Order VII Rule 11 (Exhibit 13).
  • Petitioners filed Appeal No. 41 of 2026 against the injunction rejection; respondents filed Appeal No. 45 of 2026 against the dismissal under Order VII Rule 11.
  • The Co‑operative Appellate Court (judgment dated 7 Aug 2026) dismissed Appeal 41, confirming the injunction denial.
  • The same Appellate Court (judgment dated 4 Sept 2026) allowed Appeal 45, set aside the order rejecting the respondents’ Order VII Rule 11 application, and dismissed the dispute.
  • Both writ petitions were filed to challenge these appellate orders.

Arguments before the High Court

  • Petitioners (counsel Mr Kunal Bhanage) argued that the dispute concerned management of the Society, sought disclosure of the Development Manager’s three‑year balance sheets, tender documents, and compliance with self‑redevelopment guidelines. He contended that the Co‑operative Court had jurisdiction and that Section 94(3)(a) of the MCS Act did not apply.
  • Respondents (counsel Mr Mayur Khandeparkar) argued that the dispute was not maintainable under Section 91 of the MCS Act because (i) the Society’s bylaws do not include “redevelopment” as a business object, and (ii) the Development Manager and Financer had already acquired rights in the Society’s property (executed agreements on 8 Oct 2024 and 31 Mar 2025), making them non‑impleadable parties under Section 94(3).
  • The respondents also highlighted that 40 of 50 members had vacated, 34 had executed PAAAs, and members were entitled to 23 % additional area, hardship compensation, etc., and that an interim injunction would prejudice the redevelopment.

Legal Analysis

1. Section 91, MCS Act (1960) – A dispute before a Co‑operative Court requires (a) that redevelopment be expressly included as a business object in the Society’s bylaws (post‑2019 amendment), and (b) that no agreement creating a right, title or interest in the Society’s property in favour of a third party has been executed.

2. Section 94(3) (a) – Impleadment of Third Parties – Once a third party acquires an interest before the filing of the dispute, that party cannot be impleaded, and the dispute cannot challenge the agreement.

3. Precedent judgments – The Court relied on Margaret Almeida, Baliram Misal, Parimal H. Solanki, and Anthony Carneiro:

  • Margaret Almeida held that challenges to both resolutions and development agreements must be heard by the same court; if third‑party rights exist, the Co‑operative Court lacks jurisdiction.
  • Baliram Misal emphasized the need for a positive averment that bylaws have been amended to include redevelopment and that no third‑party rights exist.
  • Parimal H. Solanki clarified that the 2019 amendment merely enables societies to amend bylaws; unless they do so, redevelopment is not a business.
  • Anthony Carneiro distinguished cases where redevelopment had not gained momentum; where it has, the dispute is barred.

4. Applying these principles, the High Court found:

  • The Society’s bylaws (as produced) do not contain a clause amending them to include redevelopment as an object; therefore the first condition of Section 91 is unmet.
  • The Development Manager Agreement (8 Oct 2024) and Finance Agreement (31 Mar 2025) created rights in favour of Vinca Realtors and Vinca Realtors Khernagar, i.e., third‑party interests existed before the dispute was filed on 13 Feb 2026.
  • Consequently, both statutory conditions for maintainability under Section 91 are absent, rendering the dispute non‑maintainable.

5. The Court therefore affirmed the Co‑operative Appellate Court’s order allowing Appeal 45 and dismissing the dispute, and held that the petitioners must approach a civil court for any injunction or challenge to the agreements.

Final Outcome

  • Both Writ Petition No. 11719/2026 and Writ Petition No. 12770/2026 are dismissed.
  • No order as to costs is made.
  • The petitioners are directed to file a civil suit if they wish to seek interim relief or challenge the development agreements and resolutions.

Topics: Legal Jurisdiction, Cooperative Housing Redevelopment