In a significant ruling that impacts Mumbai’s real estate redevelopment landscape, the Bombay High Court has declined to grant an interim injunction to a developer challenging the termination of a decade-old redevelopment agreement with a housing society in Bandra (East). The Court held that while the developer had raised serious issues, redevelopment of dilapidated buildings could not be indefinitely stalled, especially when residents’ safety was at stake.
Background of the Dispute
The case arises from a redevelopment agreement executed in December 2011 between Huges Real Estate Developers LLP and Khernagar Adarsh Co-operative Housing Society. Over the years, disputes emerged after changes in planning laws under the Development Control and Promotion Regulations, 2034 (DCPR 2034). The society repeatedly sought revised offers from the developer, demanding larger flats and higher compensation.
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Although the society’s general body initially approved the developer’s revised offer in November 2022, it reversed its stand within weeks, eventually terminating the contract on 31 January 2023. A fresh tender process followed, leading to the appointment of Kumar Vibes Properties Pvt. Ltd. as the new developer. Huges Real Estate challenged this decision in the High Court, seeking to restrain the society from engaging another builder.
Senior advocate Ashish Kamat, appearing for Huges Real Estate, argued that the termination was illegal and that the original 2011 agreement continued to bind the parties. He maintained that subsequent negotiations only altered commercial terms and did not amount to a fresh contract. "Once the society had accepted the revised proposal in November 2022, it could not have arbitrarily gone back on its word," he submitted.
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On the other hand, counsel for the society contended that the agreement had lapsed and that no concluded contract existed after the revised terms were floated. Stressing on safety, the society argued that its building was in a precarious condition and further delays would endanger lives. Counsel for the new developer added that their offer — larger flats and higher corpus payments — was far more beneficial to members.
High Court’s Findings
The Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne observed that while the single judge had noted questionable conduct on the part of the society, there was no concluded contract between the parties after the revised offers of 2022. The Court clarified:
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“The rights of the developer to earn profits must yield to the rights of residents to reside in safe houses. Losses of a developer can be compensated monetarily, but loss of safety to residents cannot be undone.”
The Bench further noted that redevelopment contracts are different from ordinary commercial agreements because delay can directly affect the lives of residents. Hence, courts must balance developers’ interests with urgent housing needs.
Case Title: Huges Real Estate Developers LLP vs Khernagar Adarsh Co-operative Housing Society Ltd. & Anr.
Case Numbers: Commercial Appeal No. 45 of 2025, Commercial Appeal (L) No. 17320 of 2025
