Builders lock horns over Rs200-crore plot

Can tenants of a cooperative society enter into a redevelopment agreement on their own, or does the will of the society prevail?

The Bombay high court will decide on the issue  when it passes verdict in a case involving two builders, both claiming the right to redevelop a prime plot in the western suburbs.

According to a suit filed by the Chavan-Maredia group, 69 tenants of the 5.49-acre Willingdon (east) plot in Santa Cruz had signed an agreement with it in 1987 to develop the plot, currently valued at Rs200 crore. However, on December 6, the cooperative society, which comprises two more adjacent plots — Willingdon (west) and Willingdon (south) — awarded the development contract to Sumer Builders.

There are 25 bungalows on the plot, comprising 69 tenants and 161 allottees. “We have paid the legal expenses, maintenance, and incurred other expenses to carry out the deal,” says the suit. The plaintiff developer has alleged that the society, Willingdon Catholic Cooperative Society, has, since the 1987 deal, made unauthorised new members who are not concerned with the said property, with the intention of capturing the 5.49-acre plot.

The society comprises three plots, admeasuring 34.04 acres. The Willingdon (west) plot measures 17.12 acres, and the Willingdon (south) section is 11.63 acres. The issue in court is related to the development of the 5.49-acre Willingdon (east) land.

As per the suit, the new deal was finalised for Rs70 crore despite an offer or Rs75 crore from the Chavan-Maredia group.

“We have a valid and subsisting agreement with the tenants’ association, and most of the tenant members have agreed to the development of the property,” argued senior counsel Fredun DeVitre, representing Dastur, Dadhich and Kalambi, solicitors.

Representing Sumer Builders, senior counsel Ravi Kadam argued that his clients have agreed to re-house all the tenants as well as the allottees. “The property belongs to the cooperative society, and such an agreement [like the one between the tenants and the Chavan-Maredia group] is unenforceable in law,” Kadam told the court.

The court was informed that out of the 69 tenants, 25 have expired and so cannot be made parties. The court has now directed that the names of these 25 persons be deleted, and those of their legal heirs be included instead.

Vacation court justice KK Tated on Thursday directed the that the remaining tenants will not enter into any development agreement till January 5, 2010, when the case comes up for hearing again.