Housing society allowed to end redevelopment deal with slack builder
The Bombay high court recently upheld an arbitrator’s decision permitting a housing society in Tilak Nagar, Chembur, to terminate its decade-old redevelopment contract with a builder. Till date, there has been little progress in the redevelopment work. On October 7, 2017, an HC appointed sole arbitrator had concluded that the contract termination was valid and directed the builder to pay the society Rs 49 lakh with 9% interest since the date of awarding the contract. In February, a singlejudge bench upheld the arbitrator’s award but the builder challenged it again and went in appeal. In July, an HC bench of Justices NH Patil and GS Kulkarni too upheld the arbitrator’s decision and imposed Rs 50,000 cost on the builder. Tilak Safalya Co-operative Housing Societies Ltd signed a contract with Srushti Raj Enterprise (India) Ltd in 2007 to redevelop its building with 24 flats. The building was vacated the same year by the 24 families living there. In 2010, the building, on land leased out by Mhada, was razed. Though a new building was to be built in two years, work didn’t start and in 2014, the society terminated the deal. In 2017, the builder challenged the termination. The builder had argued there was no provision in the agreement to terminate the deal. But pointing out that the law was well settled, the HC said, “Even if there is no provision in the agreement for termination, nonetheless under law if there is breach of the terms and conditions of the contract, the parties are entitled to terminate the contract.”
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