Bombay High Court imposes ₹5 lakh costs on non-cooperating society member for stalling redevelopment project

The Bombay High Court recently imposed costs of ₹5 lakh on a non cooperating society member for stalling a redevelopment project by filing a frivolous case and wasting public time. [SM Magnate Constructions v. New Saket Co-op. Hsg. Scty. Ltd. & Ors.].Justice GS Kulkarni said that “a single person could not take the society to ransom and cause prejudice to the majority will of the society."He opined that such situations have to be dealt with strictly as such actions of a non-cooperating member of a society seriously affects the commercial interests of the parties and compels them to approach courts and litigate.For these reasons, Justice Kulkarni imposed a compensatory cost of ₹5 lakh on the member, Ramniklal Gutka, payable to the society within a period of 10 days from May 5. .The developer undertaking the redevelopment of the society with approval from majority members, approached the Court seeking urgent reliefs during pendency of arbitration proceedings against Ramniklal.The grievance was that the only non-cooperating member of the society, Ramniklal, had brought to halt the entire redevelopment project by not vacating his tenement.It was pointed out that the developer had proceeded to get relevant permissions for the construction of the building.The Municipal Corporation for Greater Mumbai (MCGM) issued notice seeking vacation of the building since it was in a ruinous and dilapidated condition.However, Ramniklal approached the Co-operative Court under the Maharashtra Co-operative Societies Act..Justice Kulkarni opined that Ramniklal was taking “an absolutely adamant and unfair view” by not vacating his flat adding to the escalating cost of the project.“It is not the case that respondent no. 2 (Ramniklal) is being denied his legitimate entitlement as also of the monetary benefits which are entitled to the members under the development agreement in question,” the single-judge reiterated, adding that his approach was vicious and frivolous..While ordering Ramniklal to vacate his licensed premises within 2 weeks, failing which the High Court Receiver will take forcible possession, the Court deemed it fit to impose costs on him to deprecate such behaviour, and preventing it from happening in future.“This for two reasons. Firstly, respondent no. 2 (Ramniklal) has advanced a frivolous case on issues which are not even pleaded in the reply affidavit. Secondly, valuable public time of the Court has been consumed in advancing submissions on a case not averred in the pleadings, as if the Court has no other business, except to hear the respondent no. 2’s case. It also needs to be noted that there cannot be a reason for a bonafide litigant to obstruct the redevelopment on such grounds and in such manner, except for extraneous purposes. The Court’s process cannot be abused by such litigants,” Justice Kulkarni reinforced..Senior Advocate Dr Birendra Saraf with Advocates Deepti Panda Maulik Vora briefed by Pramodkumar & Co appeared for the developer.Advocates Ashish Kamat, Maulik Tanna and Disha Dave appeared for the society.Advocates AM Saraogi and RV Sipahimalani appeared for Ramniklal Gutka.Recently in another case, Justice Kulkarni had held that minority members of a co-operative society opposing redevelopment of the society building should be held accountable for the delay cause[Read order]