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Journalism of Courage
The Bombay High Court has held that a housing society cannot be compelled to give the rights of redevelopment to a builder unless there was a concluded contract between them.
Chief Justice Mohit Shah and Justice Nitin Jamdar,last week,dismissed an appeal filed by builder Gopi Gorwani against the trial court’s order of April 4 which refused him redevelopment rights of Jeevan Prabha Housing Society in suburban Bandra on the ground that there was no concluded contract between him and the society. The builder had argued that there was a subsisting and binding contract between him and the society as two resolutions had been passed in March and June last year authorising him to take over the work of redevelopment. He acted thereon and resolved some issues. He also obtained NOC from the Registrar of Cooperative Societies and gave his time and energy to the project.
The Society argued that there was no concluded contract between them and that though another resolution it had decided not to give redevelopment work to the builder.
“Having heard the rival contentions,we are of the view that the trial Judge was right in coming to a conclusion that the Notice of Motion (filed by the builder against the society) deserved to be dismissed,” the judges observed.
“Prima facie the correspondence entered into between the parties clearly indicates that the Development Agreement between the parties was not signed. Before the Development Agreement could be signed,the Society,by its resolution dated July 22,2011,decided not to continue with the appellant as their developer. Thus the Society decided not to enter into any agreement with the appellant,” the bench noted.
“The initial resolution of March 31,2011,it appears,was merely a decision to explore the possibility of redevelopment through the appellant (builder). This resolution and subsequent correspondence indicates that final decision of entrustment of development work to the appellant was yet to be taken,the judges said.
The judges were of the view that the trial Judge had rightly held that the contention of the appellant may at the most give rise to a money claim for damages. Ultimately the work of redevelopment of a Housing Society is such that the Society must have confidence in its developer.
“Once the members of the Society had by an unanimous resolution,before executing the final agreement,decided not to get the premises developed through the appellant,the Society cannot be forced to get the redevelopment work done through the appellant,when prima facie there is no concluded contract (between the parties),” the bench noted.
The balance of convenience is also not in favour of the appellant as work of redevelopment is now already entrusted to another builder,the judges observed.
During the appeal proceedings,the High Court had suggested the parties to amicably resolve the dispute. However,the talks between the parties did not fructify into a mutually accepted solution.
The builder had filed the suit in the lower Court praying for a declaration that there is a subsisting and binding contract between him and the Society. He had referred to two resolutions passed in Society’s meetings in March and June 2011 that gave him the responsibility to redevelop the Society.
The builder contended that in view of the resolutions passed by the Society and the correspondence entered into between the parties, there was a concluded contract between the Society and the appellant.
He said that inspite of the concluded contract,the Society,in a Special General Meeting held on 22 July last year,unanimously passed a resolution that the appellant is not to be awarded a contract of redevelopment of the Society’s property.
