SC upholds Bombay HC order protecting residents' right to form CHS

The Supreme Court recently rejected a special leave petition (SLP) filed by Avarsekar and Sons, a builder, against a ruling from the Bombay High Court. The ruling, made in December of 2022, allowed residents of a prime Prabhadevi building to form a cooperative housing society (CHS), instead of a condominium. The decision came after a petition was filed by Rusabh Shah, the chief promoter of the New Pushpanjali Co-operative Housing Society (proposed) in Prabhadevi, against the builder in 2018.

Shah's petition challenged the rejection of the proposed society's plea to be registered as a CHS. The Bombay High Court's ruling was in favour of Shah and, as a result, the authorities registered the New Pushpanjali CHS in January of 2023. The builder opposed this registration and filed the SLP in an effort to appeal the High Court's ruling.

In its January 20th order, the Supreme Court bench of Justices Bhushan Gavai and Vikram Nath stated that they were not inclined to interfere with the impugned judgment and order passed by the High Court. This decision came after both the builder's senior counsel, Shekhar Naphade, and Shah's senior counsel, Shyam Divan, were heard.

Justice S M Modak, in his December 23rd, 2022, judgment, expressed disappointment in the way the competent authorities were interpreting the law and their responsibility under it. Despite various judgments from the court regarding the responsibilities of these authorities, they were still mechanically refusing to register societies and following the law.

The Bombay High Court, after hearing arguments from both Shah's senior counsel Sharan Jagtiani and the builder's counsel Sanjiv Punalekar, expressed its criticism of state officials. The HC held that a mere registration of the "deed of declaration" was not sufficient to register a building as a condominium. The authorities must verify if it is in compliance with the provisions of the Maharashtra Apartment Ownership Act. In the case of the Pushpanjali building, the "deed of declaration" was not registered by Avarsekar, but by another person, who was not a flat purchaser or promoter and did not have a relationship with the members of the proposed cooperative housing society.

The HC noted that the advantage of a society over a condominium is that voting rights are based on membership rather than the area under possession. Developers, who have less control over units but more area, generally prefer condominiums. The HC held that officials have a duty to ascertain whether the declaration to register a building as a condominium has been made by the promoter or developer and if it is based on the relationship reflected in the flat purchase agreement between the flat owners and developer. If not, the officials are abdicating their duty.

The High Court's judgment and subsequent dismissal of the SLP by the Supreme Court protect the rights of flat purchasers to have a society registered. Jagtiani stated that the HC judgment upholds the rights of flat purchasers and ensures that the competent authorities are following the law.

Next (UP Government expands the YEIDA territory by 55 villages)

SC upholds Bombay HC order protecting residents' right to form CHS

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