Mrs Viswanath and Mr Kalpathi, both residents of a housing society in Chembur, Mumbai, had raised concerns about their society’s redevelopment plan, claiming that other builders are offering more space and better terms.
To elaborate on their objections, Viswanath and Kalpathi said that they have checked the records with the Ministry of Corporate Affairs and have serious concerns about the financial capacity of the builder appointed by their society for the redevelopment work.
Viswanath and Kalpathi also pointed out that their society had offers from four other builders who had offered 10% more area in sq.ft. and that could have resulted in a benefit of at least Rs 25 lakh to Rs 30 lakh for each member. yet their housing society decided not to go with them.
Viswanath and Kalpathi argued that the builder appointed by the society, apart from giving 10% less area, has also failed to sign any permanent alternate accommodation agreement or to provide a 20% bank guarantee or PMC. They further stated that redevelopment shouldn’t be imposed on the members by the majority or builders without proper legal safeguards that ensure security, compensation and enforceable rights.
The housing society, countered this argument and said that the redevelopment plan which is disputed by the said residents was passed with a majority approval (15 out of 17 members). However, Viswanath and Kalpathi lost the case in the Maharashtra Co-operative Appellate Court on September 4, 2026 in an interim judgement.
Why did the residents lose the case?
Dr. Divya Swamy, Advocate-On-Record and Partner at D&Y Law Chambers said to ET Wealth Online: The approach of the Maharashtra Co-operative Appellate Court here is more functional than technical. It ruled on its own assessment of collective good.
Swamy says that the Court denied the relief sought, primarily because the said residents (Viswanath and Kalpathi) failed to establish balance of convenience in their favour. With 14 of 17 members approving the project PAAA already signed by the Viswanath and Kalpathi, the Bank Guarantee being held recommendatory rather than mandatory and PMC appointment already resolved at a later AGM, the Court treated majority consent as outweighing the dissent.
Maharashtra Co-operative Appellate Court discussion
Absence of a bank guarantee cannot make the redevelopment process invalid
The Maharashtra Appellate Court said that the Hon’ble Bombay High Court in Antariksh Realtors Private Limited Vs. The Vidyavihar Palmview Coop. Housing Society Limited and others in Comm Arbitration Petition (L) No.19179 of 2026, ruled on July 7, 2026 that furnishing a 20% bank guarantee is only a recommendation and not mandatory.
The Maharashtra Co-operative Appellate Court said: “Mere absence of a Bank Guarantee cannot make the redevelopment process invalid. Thus, members cannot insist upon it.”
Society members voted for appointing PMC later
The Maharashtra Co-Operative Appellate Court observed that the society’s advocate Amol K. Tembe pointed out that the minutes of the AGM dated September 29, 2024, in the dispute application, showed that 15 out of 17 members had voted for appointing the PMC at a later stage.
The Maharashtra Co-operative Appellate Court said: “Indubitably, the collective will of the housing society governs the project. Except for the Disputants (Viswanath and Kalpathi), the remaining members of the society have not opposed the redevelopment.”
PAA signed after the case was filed
The PAA was signed after the case was filed and Viswanath and Kalpathi have handed over possession of their respective premises to the builder also.
Thus the two aggrieved homebuyers lost the interim case in Maharashtra Co-Operative Appellate Court. They can still file additional evidence in the main case going on in trial court.
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